From the left: Rando Rannus (Siena Secondary Fund), Kaarel Kuddu (Wise), Indrek Uudeküll (Prudentia Tallinn)

TopTech 2023: Estonia’s most valuable tech company Wise is worth 7.7 billion euros

TopTech, the ranking of Estonia’s most valuable tech companies, was this year won by Wise (valued at 7.7 billion euros). On the second place was Bolt (valued at 5.2 billion euros) and third was Veriff (valued at 1.3 billion euros). The valuation was conducted by Prudentia Tallinn, advisory of  M &A transactions, and by Siena Secondary Fund that specializes in secondary funding in high growth startups.

The total value of 30 enterprises is 20.5 billion euros. At the same time it is 3% lower than a year earlier. This time the threshold value of a tech company to get into the TopTech ranking had to be a few million euros higher than last year (64 million euros). There were also significant changes in the ranking with 5 new companies making their entry and five strong players from last year’s ranking were relegated.

Newcomers in the ranking are defense industry manufacturer Milrem Robotics (140 million euros), cybersecurity training platform RangeForce (85 million euros), cybersecurity tool that provides a state-of-the-art digital forensics solution Binalyze (90 million euros), developer of hydrogen technology Elcogen (224 million euros) and platform for automated trading in cryptocurrencies Bitsgap (128 million euros).

“In spite of financing problems, the local tech ecosystem remains in good health. The global financing crisis is not yet reflected in the value of companies, and the interest of foreign investment funds in Estonian tech companies continues to be high,” noted Indrek Uudeküll, partner of Prudentia Tallinn that conducted the valuation. “While in recent months both Estonian and international media have been making headlines of how the startup sector has been affected in the biggest crisis of a decade, the TopTech 2023 ranking proves that we have actually returned from the temporary bubble to the old reality. It should be added that because of lack of public financial data, several valuable companies such as Pipedrive were excluded from the ranking,” he explained.

Uudeküll added that in 2023, Estonian startup sector saw an impressive number of exits (although not in monetary terms), i.e. exits of founders and original investors through the sale of holdings in companies. „It is good to know that the money earned from these successful exits is being increasingly reinvested in Estonia. The more there is local capital to finance companies in successive funding rounds, the more such generated value will remain in Estonia and the bigger the hotbed for our unicorns will be in the future,“ Uudeküll said in comment to the trends.

Rando Rannus, partner of Siena Secondary Fund that co-compiled the valuation, said that the 2023 TopTech ranking balances media reports of a “bloodbath” in the tech sector, staff redundancies and funding problems. At the same time the data collected in the course of preparing the valuation show that revenues of startup companies continue to grow and many of them have increased their value. Estonian startups are on a robust foundation and those who are on the top continue to grow.

According to Rando Rannus, a significant shift in the Estonian startup landscape is the growth in the number of M&A transactions. „Estonian startups have long been synonymous with innovation, agility, and disruptive ideas. However, as these startups mature and reach a certain scale, they face a crucial decision point: whether to sustain independent growth or join forces with another startup or a larger entity through M&A,“ he explained. Rannus added that the year 2023 is a clear indication that M&A deals are no longer seen merely as exit strategies but as deliberate moves towards growth and innovation.

TopTech ranking is a tool that helps to gauge and analyse the potential of Estonian tech companies and their contribution to the local economy. The ranking is compiled on the basis of comparable time-specific valuations calculated with robust methodology.

To visit the Estonian 2023 TopTech ranking click here: https://www.toptech.ee/

Valuation methods of TopTech ranking: 

Eligible for TopTech ranking are high growth tech companies that have at least one Estonian founder or that are registered in Estonia AND whose head office or at least 20% of whose employees are based in Estonia.

The equity value is calculated as follows:

The basis of the valuation is publicly available financial information and additional insights provided by the companies themselves.

Due to the nature of the technology sector (low debt ratio), we only evaluate equity as the enterprise value and equity value, in this case, are fairly similar.

     - If a company is listed (including on alternative investment platforms or tokens on crypto exchanges) the market cap as of 31.08.2022 is used as a value;

    - If a company has had a funding round in the last 12 months, the value is calculated on the basis of the last funding round;

    - If a company has been sold in the last 12 months to a financial investor, the shares’ sales price is taken as a value;

    - If none of the above apply, but a company has disclosed its financial data to TOPTech compilers or these are publicly available, then the valuation is based on revenue multiples using a sample of comparable companies, who have raised capital in the past 12 months or are listed on a stock exchange;

    - If a company’s financial data is not available to TOPTech compilers and the company has not had a funding round nor been sold to a financial investor in the last 12 months, the value of the company remains unchanged from the previous year;

    - If a company’s financial data is not available to TOPTech compilers and the company has not had a funding round nor been sold to a financial investor in the last 24 months, the company is not included in the TOPTech ranking.

The valuation was conducted by Prudentia, in collaboration with Siena Secondary Fund. The sources for publicly available information are Crunchbase, Infopank, Mergermarket, Startup Estonia.

Additional information:

Indrek Uudeküll, partner of Prudentia Tallinn; email: indrek.uudekyll@prudentia.ee

Rando Rannus, partner of Siena Secondary Fund; email: rando.rannus@siena.ee