From left: Rando Rannus (Siena Secondary Fund), Jaanus Tamm (DefsecIntel Solutions), Lars Trunin (Wise) and Indrek Uudeküll (Prudentia Tallinn). Photo by: Ilmar Saabas, Delfi Meedia  

Press release

16 October 2024

TopTech 2024: Estonia's most valuable tech company Wise valued at 8.6 billion euros

This year’s TopTech, ranking of Estonia's most valuable technology companies, was won by Wise (valued at 8.6 billion euros). The second place went to Bolt (valued at 5.5 billion euros) and the third was Pipedrive (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.

According to Indrek Uudeküll, partner of Prudentia Tallinn that conducted the valuation, Wise is the undisputed leader of the Estonian tech sector and its position at the top is being contested only by Bolt, ranked second with a valuation of 5.5 billion euros. “We hope to see soon whether in the next few years Bolt’s planned IPO becomes so successful that it will put Bolt on top of our ranking,” he noted.

This year the total value of 30 ranked companies was 19.2 billion euros, decreasing by 6% over the year (2023: 20.5 billion euros). According to Indrek Uudeküll, the slight decrease in the total value is due to the fact that, compared to 2023, the ranking no longer includes such well-known names as Glia, Testlio, Starship, Lightyear, Ready Player Me and Veriff. “Since the head offices of these companies are located outside Estonia, their financial data are simply not available, making it difficult to determine their value. Let me remind you that for companies that have ranked in TopTech, our valuation is based either on public data or data provided by the company itself," he explained. This is also why the threshold for being ranked in the TOP 30 dropped to 30 million euros this year.

It means that the positions of several well-known companies in TopTech are now occupied by newcomers, such as DefsecIntel Solutions (valued at 110 million), Threod (valued at 47 million euros), Ridango (valued at 62 million euros), LEI Register (valued at 44 million euros) and Verge Motocycles (valued at 70 million euros).

With this year's special award “Rising star in the defence tech” which was won by one such newcomer DefsecIntel Solutions (15th overall), the compilers of the valuation draw attention to the significant growth of the defense tech sector in the Estonian startup segment, said Uudeküll. “DefsecIntel Solutions and Threod represent the future of the whole sector, attracting significant investments and demonstrating their ability to innovate in cutting-edge areas. The proceeds from the acquisition of Milrem Robotics have already led to the foundation of new companies. One that is most likely to feature in the next year’s TopTech is Frankenburg Technologies,” he added.

According to Rando Rannus, partner of Siena Secondary Fund that co-compiled the valuation, due to the decrease in the volume of new capital investments, companies ranked in TopTech and the entire Estonian tech business are increasingly influenced by the secondary market in venture capital which instead of injecting new capital into startups, trades with their existing shares. “We have also seen some secondary market transactions in Estonia, but this is only a drop in the ocean – the market capital of all Estonian startups is well over 15 billion euros, but the liquidity need is a few hundred million per year. Therefore  it is not only Bolt employees and investors who are waiting for an IPO – the entire ecosystem needs a new major liquidity event that would give a strong momentum to the development of the entire Estonian startup ecosystem through new capital, the entry of talent into the market and, most importantly, a new positive success story that would help inspire the next generations,” he said about the expectations of the Estonian tech sector in the coming years.

According to Allan Martinson, President of the Founders' Society, the view of this year's TopTech and the sector as a whole is that tech companies are hard at work: "They are more resilient and more efficient, their processes are in order and once the volume of investments is gradually restored, they will be ready for a new faster growth cycle". According to Martinson, clear statistics show the vitality and progress of the sector: "In 2020, the Estonian startup industry employed 10,000 people who made 1.5 billion euros in revenue. Now we have 16,000 people employed in the sector who generate 5 billion euros in revenue. This is about twice the revenue growth per person in four years. At the same time the total workforce in the Estonian startup sector has fallen by about 5% over the past year. In other words, the revenue is increasing, the number of employees is decreasing, the efficiency is increasing, while such key indicators in the startup sector as the cash burn rate (the ratio of cash reserves to operating loss) is decreasing, and the cash runway (number of months until cash runs out) is increasing.”

Martinson pointed out that the results of the survey conducted by the Founders' Society among its members in the spring were encouraging – around two-thirds of Estonian startups are either already profitable or have a clear projection to become profitable in the near future and do sense an acute runway problem.

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 2024 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 31.08.2024 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 applies, but the company has an investor who has valued the fair value of the company and the valuation is available from public data, the value is calculated on the basis of the investor's valuation;

• If none of the above applies, but a company has disclosed its financial data to the compilers of TopTech 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 are not available to the compilers of TopTech 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 are not available to the compilers of TopTech 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 evaluation 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