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Inside Estonia’s tech startup scene

Estonia is a Baltic tech tiger that is fast-gaining an international reputation for competently delivered government e-services at a level that surpasses most of its European and international counterparts

They call it e-Estonia. The temptation not to prefix this Baltic former Soviet nation with an “e for electric” name tag was too great. But the combined forces of the Invest Estonia, Enterprise Estonia and e-Estonia organisations aren’t just using the label for marketing spin – this is a perhaps surprisingly advanced, high-income society creating its own place on the international technology scene.

As already reported by Computer Weekly, Estonia has been on a progressive development trajectory since the country gained independence from Soviet rule in 1991. Starting with little or no legacy infrastructure in most economic sectors, Estonia drew upon its scientific knowledge base to rapidly develop internet-driven public services and gain a reputation for being a digital nation.

With further development driven by its Tiigrihüpe (Tiger Leap) computer network infrastructure development programme, a maverick yet understated approach pervades throughout Estonian organisations and individuals alike.

Now, in 2021, as Estonia celebrates its 30-year independence anniversary, e-Estonia wants to tell the next chapter of its story. With the world on the edge of post-pandemic reawakening, the Invest Estonia organisation stole a march on almost every other tech conference or symposium in Europe, the Middle East and Africa (EMEA) or the US by staging its Digitally Wild technology tour to showcase national IT development.

Estonian tech unicorns

As a prelude to any Estonian technology analysis, it’s important to remember that Estonia’s most famous technology export is Skype, which was started by a group of four developers from the nation’s capital, Tallinn. Estonian IT has also made headlines more recently with Bolt, its Uber-challenging, ride-share, food delivery and scooter business. Other homegrown unicorns include ID.me, playtech, wise, pipedrive and Zego.

“In the past 30 years, Estonia has become one of the most wired and technologically advanced countries in the world – a true digital society”
Siim Sikkut, Estonia

“Estonia’s digital success didn’t happen overnight – it was the result of decades of investment and experimentation and collaboration between the public and private sector,” said Siim Sikkut, government chief information officer (GCIO) for Estonia. “It is about much more than technology. The key ingredients are political will and trust. The latest study showed that 82% of residents trust Estonian e-services.

“In e-Estonia – a paperless digital and tech-savvy society – people file their taxes, do banking, sign documents, vote in elections and get a prescription over the internet. All these processes are fast and can be carried out from the comfort of a person’s own home or office, using a secure state-issued Estonian ID card. In the past 30 years, Estonia has become one of the most wired and technologically advanced countries in the world – a true digital society,” added Sikkut.

Estonia’s tech startups

If Estonia has now passed the point on its IT evolution curve where it can start talking about established domestic IT players, it does at least pave the way to building a new tech startup scene. The capital, Tallinn, is home to a dedicated co-working hub and network of startup founders who come together under the name Lift99.

The Lift99 building itself is a full-on hipster-chic affair with a touch of Bladerunner meets London’s Shoreditch. An open entrance beckons guests inwards with no formalised reception area. Consequently, the first thing a guest encounters are the broken, unfinished steps and walkways that lead upwards and inwards.

The building is a former railway engine maintenance foundry and the current owners have kept the slightly grunge look and feel throughout. Entering the first floor area, guests are invited to take their shoes off, place them on a shelf and don a pair of communal slippers – it’s an Estonian cultural thing, not a startup thing – before settling down on a beanbag.

Child-friendly innovation

Speaking at the Estonian tech promo tour this year at Lift99 was Vivita, a specialist in child-friendly open workshops that act as so-called “invention laboratories”.

Co-founder and CEO Mari-Liis Lind said her organisation’s operational raison d’etre is the provision of creative learning studios where children can gain competency with ground-level business-type tools and experience the benefits of mentorship and acceleration initiatives.

Vivita typically works with children aged from eight to 10. But is this youth-level business drive too much too soon for some kids? It’s not, according to Lind, because age nine is widely thought to be the most productive learning and developmental period for many children.

“Very often you might find that the school [system] says something is not possible, so we want to open up a wider realm of developmental possibilities for children,” she added. “In reality, the children don’t find it daunting at all and they relish the idea of creating their own business innovations. To be honest, it’s the parents who are normally the nervous ones.”

In most modern economies, only around 2% of people are generally categorised as creative, said Lind, so that’s a figure she wants to increase. The organisation teaches children how to create a prototype, how to break a prototype and then move forwards for higher success.

Breaking the fakes

Also speaking at Lift99 was Vistalworks, a data technology startup that aims to protect shoppers from the harm of fake and illicit goods. Its intelligence software combines risk profiling tools to detect smuggled goods, counterfeits and untested products so that European borders can be protected.

British-born Vistalworks CEO Vicky Brock left the UK for Estonia to start the company from within the European Union (EU).

“I had never been to Estonia until I first came here and had to open a bank account. I was initially slightly worried that I was being conned, because it was so easy to work with the systems in place here,” she said. “All the young people here in the tech startup scene are very good for the soul and the energy experience.”

Another darling of the Tallinn tech startup scene is Single Earth, a deep tech startup that is aiming to disrupt corporate climate action. The firm’s mission, said CEO and co-founder Merit Valdsalu, is to value nature for more than just its raw materials.

“We need to incentivise the protection of nature by monetising the carbon and biodiversity elements that exist in the economy,” said Valdsalu. The organisation has been described as a platform designed to “tokenise” nature. It enables forests, wetlands and all other “planetary resources” to create profit streams for the landowners who lay claim to them.

Single Earth’s platform works to allow those landowners to sell and trade carbon and biodiversity credits, rather than traditionally traded raw materials. This is now commonly referred to as carbon sequestration – or the long-term removal of carbon dioxide from the earth’s atmosphere.

Single Earth uses satellite imagery twinned with big data analytics and an element of machine learning (ML) to detail the degree to which any place on the planet absorbs CO2 and maintains its level of biodiversity health. The organisation provides a “merit” token for every 100kg of CO2 sequestered. The tokens, which have a limited lifespan, can be traded, used to create profits through carbon offsetting or used as an investment.

National startup psyche and mindset

The technology leaders and evangelists in Tallinn seem to convey a general feeling of “can do”, and the government’s startup visa makes it easier for firms that are looking to grow to bring the right kind of talent into the country.

There seems to be an acceptance in the country that a startup can be an actual company, a reality than could be down to the size of the nation with its 1.3 million population. Equally, it could be down to the state of the nation’s still-nascent economic evolution, or its former Soviet legacy throughout both the Estonian public and private sectors.

It remains to be seen whether Tallinn will join the US-located major tech event hubs, such as Las Vegas, San Francisco, New York and Chicago, alongside the European usual suspects, such as Barcelona, Munich, Amsterdam or Paris.

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