Estonian Funds Have Invested Half a Billion Euros Over Six Years
First Comprehensive Analysis of the Sector’s Economic Footprint
For the first time, EstVCA has measured the direct impact of its member funds on the Estonian economy and state budget.
“In our analysis, we looked at investment volumes since 2019, the number of Estonian companies in fund portfolios, their taxable turnover, employment count, and labor taxes,” said Madis Lehtmets, Managing Director of EstVCA.
Between 2019 and 2024, Estonian PE and VC funds invested a total of €494 million, while the number of Estonian companies in their portfolios almost tripled from 55 to 155. Altogether, Estonian funds now hold stakes in more than 470 portfolio companies. In 2019, these portfolio companies generated €311 million in taxable turnover in Estonia; by the end of 2024, this figure had grown to €2.02 billion. While the number of portfolio companies has increased during this period, the overall growth clearly demonstrates that the sector’s contribution to Estonia’s economy has expanded substantially.
Fourfold Growth in Labor Tax Contribution
The labor tax contribution of fund portfolio companies to the Estonian state budget has also grown sharply — from €28.4 million in 2019 to €123 million in 2024, a more than fourfold increase.
As of the end of last year, approximately half of all capital raised by Estonian funds remained uninvested. Since the inception of the first local funds, Estonian PE and VC funds have raised a combined €1.6 billion, of which €767 million is currently available for new and follow-on investments.
A Globally Competitive Industry Built Over 15 Years
According to Kaari Kink, Chair of EstVCA’s Management Board, the Estonian private equity and venture capital market has evolved into a globally competitive industry over the past 15 years.
“Our domestic capital market is now both experienced and ambitious. Member funds attract international capital to Estonia and play a vital role in shaping the growth of startups and scale-ups. New investment opportunities are actively pursued across Europe and as far afield as Africa and Asia. At the same time, Estonian companies remain a strong focus — currently accounting for about one-third of fund portfolios,” said Kink.
While attracting foreign institutional capital remains crucial, recent years have also shown the growing importance of local capital in financing early-stage companies.
EstVCA’s Evolving Role in a Maturing Market
As the Estonian PE/VC industry becomes more mature and international, EstVCA’s role is expanding as well. Historically, the association has focused on developing the capital market, advocating for a transparent regulatory environment, and working with policymakers.
“Many of our members are currently fundraising for new funds, but the conservative sentiment in global capital markets and ongoing geopolitical tensions have had an impact. Fund managers must work harder than ever to attract new commitments. This is why EstVCA’s work in representing our region to both regional and international investors has become increasingly important,” explained Kink.
Promoting Estonia’s reputation as an investment destination remains a top priority.
“Supporting fund managers in raising new funds is essential for the sustainability and independence of Estonia’s capital market. But we must not forget that every investment is ultimately about people. Our mission is to collaborate with founders, fund managers, foreign investors, policymakers, and the next generation — to take Estonia’s technology ecosystem to the next level,” said Lehtmets.
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