Like many former Soviet republics, Estonia emerged from the Soviet collapse saddled with the debris of a Moscow-oriented economy; sprawling, military-focused heavy industries; and a backward agricultural sector reliant on cheap labour and backbreaking manual work.
In 1993, the new republic had a GDP of just US$4.01 billion. In 2023, that figure had grown to US$40.7 billion.
Today, with a population of just 1.3 million, the small Baltic nation has become a factory for high-growth tech firms, earning it the moniker of Europe’s “start-up nation”’. Estonia now boasts more than 1,500 start-ups and claims one of the highest numbers of unicorns per capita in the world.
The Edge Singapore was invited by Enterprise Estonia, the international trade arm of the Estonian government, to visit the nation’s start-up scene in the snow-blanketed capital of Tallinn in late February.
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Central Tallinn, despite its medieval town and castle dominating much of the city’s character, is surprisingly youthful. The bright displays of a large number of homegrown and international brands dot its streets, hinting at the country’s entrepreneurial and tech-savvy nature.
The modern Estonian start-up scene can trace much of its energy and ambition back to one company — Skype.
Co-founded by a group of Estonian engineers alongside Swedish and Danish partners in 2003, Skype’s pioneering voice-over technology transformed internet communication.
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When the firm was sold to eBay for US$2.6 billion in 2005 and later acquired by Microsoft, it did more than inject capital into Estonia’s fledgling tech scene; it kickstarted a generation of enterprising Estonians with an eye on achieving global exposure.
Many of Skype’s early engineers and employees went on to become serial founders, angel investors, or mentors, creating a cycle of innovation often dubbed the “Skype mafia”.
In fact, two of the country’s most famous unicorns, Wise and Bolt, emerged from this.
Wise, formerly known as TransferWise, was founded in 2011 by two Estonian entrepreneurs frustrated by the high fees of international money transfers.
Through offering a cheaper, transparent alternative, Wise grew into one of Europe’s largest fintech firms, listing publicly in London in 2021 with a valuation of over US$10 billion. The company today has a global presence, opening its Singapore office in April this year.
The other unicorn, Bolt, founded in 2013, took on the likes of Uber in the ride-hailing and delivery space, with founder Markus Villig launching the company when he was just 19 years old.
Today, Bolt has a valuation north of US$8 billion ($10.4 billion) and operates in more than 45 countries across Europe and Africa, offering not just ride-hailing but also e-scooter rentals, food delivery, and grocery services.
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Despite the success of its entrepreneurs, Estonia has a domestic market too small to sustain a large start-up economy on its own. To counter this, the country cleverly launched its e-Residency programme in 2014, which allows non-Estonians to become virtual residents of the country, giving them access to Estonia’s advanced digital infrastructure and enabling them to establish and manage EU-based companies entirely online.
For an application fee of just EUR150 ($219), e-residents receive a government-issued digital ID card that lets them sign contracts, open business bank accounts, file taxes, and access Estonia’s vast array of e-government services — without ever needing to set foot in Tallinn.
“Over these 10 years, around 122,000 people have become e-residents. E-residency is given out for five years, and you need to renew it again for another five after. Currently, half of those people who have become e-residents in the first batch are now still active,” says Vaido Mikkheim, head of the government’s start-up arm, Startup Estonia.
He adds: “[There are] those who might not feel the need to renew the residency, but those who have created a company usually renew the residency now. In fact, every fifth company created in Estonia is created by e-residents, so they are contributing a lot to the Estonian economy, and we measure this through labour, taxes paid and dividends paid.”
The government has worked hard to reduce red tape, offering streamlined company registration, e-signatures, and zero corporate tax on reinvested profits.
Startup Estonia provides mentorship, matchmaking services, and support programmes for founders, while Enterprise Estonia offers export advice, innovation grants, and market-entry support.
Despite this, Mikkheim says attracting global talent outside of Europe to the country has been a challenge.
He adds: “Our target countries are all of the EU countries — Singapore is also a target market, but we don’t get to go there often. We see that we mostly speak to those who are already looking towards the EU, and we are so far away from you guys, and the Asian market is so big, so we don’t see that many coming in from Southeast Asia.”
Plinte (left) says his muon technology enables a scan of up to 20 metres, as well as a breakdown of the chemicals and metals present.
Better than an X-ray
As Estonia’s e-residency programme invites entrepreneurs from around Europe and the world, the country’s own start-up scene continues to thrive in spite of its small talent pool.
One such innovative company is GScan. Founded in 2018 by Hannes Plinte and a group of European Council for Nuclear Research (CERN) physicists, engineers, and entrepreneurs, GScan has commercialised a technology akin to X-rays, but with more accurate visuals and in-depth scans.
GScan’s technology, known as muonFLUX, utilises the constant bombardment of subatomic particles generated when cosmic rays interact with the Earth’s atmosphere, called “muons”, to scan and create detailed 3D images of objects.
The technology can penetrate up to 20 metres of material, surpassing the limitations of traditional X-rays. Muons penetrate materials and scatter at angles dependent on the atomic number and density of the substances they pass through. This enables GScan’s system to reconstruct internal structures with precision, achieving spatial images down to one millimetre and even the breaking down of chemical compositions detected.
Furthermore, unlike X-rays, muon scanning does not emit harmful radiation, making it safer for both operators and the environment.
GScan’s technology has attracted interest across various sectors. In infrastructure especially, it enables the non-destructive evaluation of aged bridges, tunnels, and buildings, identifying internal defects such as corrosion or voids without the need for invasive procedures.
The company also has eyes on the security sector, with its “SilentBorder” initiative aimed to detect contraband in shipping containers without manual inspection, enhancing border control measures.
“Our goal is to build our technology for port applications. We are aiming to achieve a scan speed to detect one kg of narcotics within one minute,” says Plinte.
To support its growth and technological advancement, GScan secured EUR3 million in seed funding in 2024 from investors including Bolt founder Villig and Japanese corporate venture funds.
The company also received a EUR2 million grant from the Estonian Business and Innovation Agency to further develop its sensor elements and production technology.
Plinte says: “If we get more investments, then we would probably go to Canada or the US market. We are relying less on our market exposure, but more on our research network, and we want to work with at least offices in 60 or more countries around the world.
“These companies would be our targets to distribute our technology, but we do not want to have an exclusive contract with them, as we also need other potential partners.”
While GScan’s technology is more superior in capability and versatility than traditional scanning technologies such as X-rays, Plinte says that convincing investors has been an uphill battle due to a lack of awareness and cost.
He explains: “We need to really show and improve our technology all the time, and … this is new so it’s expensive. It’s much more expensive compared to, let’s say, not even X-rays, but checking on infrastructure with a hammer and a torch. Those are traditional methods, and so ours is much more expensive and we need to show the benefits of our technology.”
Thankfully, with ageing infrastructure particularly commonplace in Europe, Plinte says that GScan is not short of opportunities to demonstrate its capabilities.
He adds: “The more and more time passes, the risk of bridges collapsing increases. For example, when the bridge collapse happened in Dresden, Germany, in 2024, that incident actually sped up the awareness of our technology in Germany by about a year.”
Trademarking the company’s technology as intellectual property (IP) is also not out of the question, says Plinte.
“We have been thinking of that. For example, in terms of border security, then we probably would license the technology out, and the same actually with the medical sector. If we can offer our devices to clients who come to us and say our devices have the potential to be used for medical tomography, then absolutely yes, an IP would be considered.”
Today, GScan collaborates with institutions such as Imperial College London, the University of Sheffield, CERN, and the European Space Agency to advance its technology and explore new applications.
With offices in Tallinn and Tartu in Estonia, as well as Cambridge in the UK and Munich in Germany, Plinte says that GScan aims to first establish its presence in the UK to attract foreign investment.
Martens (far right) Gelatex has around 20 active medical or wheelchair projects and 60 partners in the cultivated meat space.
Gelatex solves problems
Another Estonian firm that showcases the country’s deep-tech ambitions is Gelatex Technologies, a nanofiber-focused company.
Founded in 2016 by materials scientist Märt-Erik Martens and entrepreneur Mari-Ann Meigo Fonseca, Gelatex initially set out to create a sustainable, leather-like textile made from gelatin, offering an eco-friendly alternative to animal-based or synthetic materials.
At the heart of Gelatex’s success is its patented “HaloSpin” technology, a high-throughput nanofiber production method that sidesteps the limits of traditional electrospinning, a method for producing nanofibers by pulling charged threads of polymer solutions using electricity. Where electrospinning struggles to scale, HaloSpin enables continuous, large-scale nanofiber manufacturing at speeds up to 100 times faster and at a fraction of the cost.
The resulting fibers, with diameters as small as 100 nanometres, can be tailored for specific applications from scaffolds in regenerative medicine to edible carriers for cultivated meat production.
“We’re able to reduce the cost of nanofibers by more than 90% and that opens up immediate applications where nanofibers couldn’t be considered,” says Martens.
Additionally, Gelatex’s Gelacell product line has opened doors in the biomedical sector, where 3D cell cultures and tissue engineering require scaffolds that mimic the body’s healing. By providing customisable, porous, biocompatible structures, Gelatex enables researchers and companies to accelerate breakthroughs in wound care, regenerative therapies, and drug development.
Martens explains: “I think anybody who has had a cut knows that when the wound heals, there is a scar tissue formation, and that’s mainly because the cells don’t know exactly which direction to grow. Our nanofibers, immediately, right from the machine, once applied, provide a 3D structure which enables cells to grow into and form tissues on it, resulting in a scar-free healing.”
Currently, he says that Gelatex has around 20 active medical or wheelchair projects with different companies all over the world, from Asia to the US.
“Basically, currently, we’re in this development phase where the customer is trying to figure out what they want, and we are making them samples for their tests.”
It is perhaps in the fast-growing world of cultivated meat that Gelatex has generated the most international buzz. Its edible, highly porous microcarriers, made from Generally Recognised As Safe (GRAS) ingredients, provide the scaffolding on which animal cells can grow, turning a laboratory slurry into something with the texture and density of real meat.
“We have developed edible, fully edible scaffolds made from different plant-based proteins, which are cost-effective,” says Martens.
He notes that while the materials are edible, they can be toxic for cells.
He continues: “That’s not okay. So we need to balance between biomedical materials and edible materials. We have one patent which we filed last year, around cultured meat scaffolds, that finally, after quite a long cycle of development, is now being approved in Singapore and in Europe.”
With over 60 partnerships in the cultivated meat space, Gelatex claims its scaffolds can support up to 300 tonnes of cultured meat production annually, putting the Estonian firm at the centre of one of the foodtech industry’s most transformative trends.
“We do work with around seven Singaporean clients who are using our products currently in their development phase. The majority of them are still ramping up production, so we are supporting them with our materials in their development phase,” says Martens.
Beyond its own product lines, Gelatex offers contract manufacturing and development services, working with clients across industries to create bespoke nanofibrous materials, including those infused with active pharmaceutical ingredients.
Furthermore, as part of its strategy to expand access to nanofiber technology, the company is exploring licensing its HaloSpin technology to third-party manufacturers, expanding its reach without the need for heavy capital expenditure.
With its applications and successful partnerships across multiple industries, Gelatex has not gone unnoticed. In 2019, the company won the Green Alley Award, a sustainability prize for start-ups offering circular economy solutions.
More recently, it claimed second place in the KPMG Global Tech Innovator 2024 competition, competing against nearly 1,500 companies worldwide. This recognition has brought not only prestige but also vital funding: Gelatex recently secured EUR760,000 in EU grants to further develop its edible scaffolds.
In spite of its success, however, the company still faces the typical challenges of a deep-tech start-up.
Martens says: “When you have brought in investors, or you’re aiming to bring in investors, they’re generally used to a much faster pace of development in deep-tech. But in our case, and there are many similar examples like quantum computing for example, everything takes time — way more time than investors are used to.”
He surmises: “Funding is out there, but finding the right type of specialised funding is the challenge, because to me, deep-tech nowadays is kind of devalued. Some companies are building their product on top of existing packaged technology claiming to be deep-tech, and that doesn’t make any sense to me. So it’s really about finding the right type of funding.”
Lessons on both ends
While Estonia’s transformation from a post-Soviet state into a digital powerhouse is remarkable, Singapore’s ascent as a start-up hub in Southeast Asia is a compelling parallel.
According to the Singapore Institute of Directors (SID), from July 2021 to December 2023, Singapore’s start-up ecosystem reached an ecosystem value of US$144 billion, marking a 27% increase over the previous two years. Notably, Singapore also accounted for 63.7% of all equity deals in the Asean region in 2023, up from 56.7% in 2022.
Estonia’s journey, from a country with little internet penetration in 2000 to the world’s first fully digitised government by 2024, mirrors Singapore’s own transformation from a resource-scarce port into a global financial and tech hub.
Both nations have defied limitations, yet their approaches differ. Estonia, with its e-residency program and decentralised governance, has democratised entrepreneurship, allowing global founders to tap into its digital ecosystem. Meanwhile, Singapore thrives on state-driven initiatives like Smart Nation, blending regulatory efficiency with aggressive foreign investment attraction.
As both these small countries enter 2025 with new geopolitical hurdles and a looming economic slowdown, their ability to adapt will certainly be tested.
Estonia must balance its digital ambitions against an increasingly assertive Russia on its border, while Singapore navigates the delicate task of maintaining its neutral stance amid rising US-China tensions. History suggests, however, that these nations can turn constraints into opportunities — be it through Estonia’s culture of innovation or Singapore’s calculated pragmatism.
