Estonia leads the world in social innovation with a mature funding ecosystem, people-centric focus, and advanced digital capabilities.

Estonia is a little known Baltic State making big moves in digitalization and social innovation. According to the Estonian Startup Database, there are 1,110 startups operating in Estonia and 66 new startups have been created in 2020. It’s also the only nation on Earth where 99% of all public services are available online. The country itself is a key Use Case for any nation or company looking to embrace social innovation. Estonia’s success in this arena is attributed to its dedicated state-sponsored funds, people-centric focus, and mature finding environment. As a result, the country has been able to achieve a digital society (dubbed e-Estonia), has produced some of the world’s leading, cross-sector startups and digital solutions for its citizens, and continues to top the global ranks as a leading nation in social impact.

Estonia has dedicated fund entities that work to elevate its citizenry. For example, the Estonian Development Fund is a state-run Untitled2public institution that invests into young and growth-oriented technology companies together with the private sector. The fund is aimed to invest into knowledge-intensive and high-technology Estonian companies that are in the launching stage, offering management-related support to the relevant operators (EU Commission). Moreover, the EUR 100M Baltic Innovation Fund (BIF) launched in the recent past exclusively focused on the Baltic States like Estonia to develop SMEs and boost growth. In addition to state-run funds, there are also a host of VCs and PE firms in Estonia that focus on social innovation verticals.

On the topic of VC, the revenue of Estonian startups totaled €562 million in the third quarter of 2020. According to Change Ventures, “Estonian startup round sizes and valuations continue to be larger than their compatriots in Latvia and Lithuania, reflecting a more mature funding ecosystem. The top quartile valuations for Estonian seed rounds actually exceed median US startup valuations, reflecting the massive growth in angel and super-angel investors in Estonia.” Crunchbase has further reported that Estonia is showing higher growth than usual, and that “Many point to Estonia’s early success with Skype as the catalyst for the country’s bubbling and uniquely successful startup culture, which has borne five unicorns. Pipedrive was the latest to join the ranks in November 2020.”

Estonia allows for quick startup turnover in social innovation because of the maturity of its digital infrastructure, as well as the relatively low living costs (common to all Baltic States). This encourages social entrepreneurs to participate in the market. Startups in Estonia also operate on the premise of social good. For example, Immediately after the state of emergency (last March) was declared in Estonia, Garage48 and Accelerate Estonia organized an online hackathon, “Hack the Crisis”, to provide solutions on how to use technology for crisis response and how to cope in the post-crisis era. The idea of ​​the hack soon spread all around the world, leading to a Global Hack involving more than 12,000 people in 100 countries. In addition, many country-specific hackathons took place during the spring to find solutions to the damage caused by the corona crisis (Startupday).


With a mature funding ecosystem that champions humans at its core, and Estonia’s advanced digital capabilities, it’s no wonder why this nation leads the world in social innovation.

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This publication has been prepared within INDIGISE project. The content of this publication is the sole responsibility of the project coordinator and may not always reflect the views of the European Commission or the National Agency.