Company founders and international investors are visiting Tartu in January for perhaps the Baltics’ biggest startup convention. The eastern Estonian university city has become a startup hot spot almost overnight.
Lightening the daily load can start with taking out the trash. When one of his school friends complained about taking the garbage out at home, Joonatan Oras and three of his buddies dreamed up Wastefox, a balcony compost box. Oras was 16 then; today he’s 20 and studying journalism and PR at Tartu University in Estonia. Together with 35-year-old psychologist Madis Vodja, he has now optimized the Wastefox. In it, fruit and vegetable scraps turn into rich humus in just a few months. Oras and Vodja sell around 1000 boxes a year, and even the Estonian capital, Tallinn, has noticed their startup and equipped 150 households with Wastebox. The aim of the project is to see if the composter could help to realize the EU’s ambitious plans to recycle more than half of European household waste by 2025.
Identify a problem, devise a solution and conquer the market with it: Sponsored by investors with an appetite for risk, young developers across the globe are working on the Next Big Thing. The hot spots for the scene are San Francisco, London, Tel Aviv – and Estonia. The small Baltic country was once known mostly for its forests and moorlands. It may have only one expressway but Estonia has overtaken other countries on the data highway. The state’s constitution guarantees people the right to Internet access with countless free WiFi hot spots and nationwide LTE coverage. Digitalization has found its way into all areas of life, from tax returns to parliamentary elections and founding businesses: In Estonia, a few clicks takes care of them all.
Within a few years, Estonia’s very liberal tax system and targeted venture investments have also earned the country (population 1.3 million) the nickname “startup nation.” In 2019, some 5000 people were working for around 650 new businesses – the highest rate in Europe compared with the total working population. Among best-known startups based on know-how from Estonia are the taxi app Bolt, the Skype messenger service, the online payment system Transferwise and the games developer Playtech. Look for Estonian startups and you will find them in the business districts of Tallinn, the capital – but also in Tartu some 200 kilometers away, the second-largest city in the country – not that it’s immediately obvious that the future is being planned here.
The picturesque old town clings to Toome Hill with its imposing cathedral. In the valley below, the Emajõgi River flows sedately eastward into Lake Pelpus on the border between Estonia and Russia. Tartu is literally on the edge – and yet right at the heart – of Europe; it is home to 120 nationalities, and 13 000 of its 100 000 inhabitants are students at the country’s oldest university, which was founded in 1632. Young people stroll through the cobbled streets in the center of town, glide along the riverbank on rental bikes and populate restaurants, cafés and bars. The university is the soil on which the state’s Internet-friendly politics act like fertilizer. This is especially true as the university regularly organizes “speed dating” at the Spark Hub on the edge of the old town, where students go to find brilliant business ideas by meeting with startup mentors such as lawyers, marketing and IT professionals.
Sophio Japharidze, Mariam Mikava and Ketevani Kvirikashvili, all in their early twenties, attended in October 2019. They developed a ring that measures its wearer’s heart frequency and oxygenation of the blood – allegedly more accurately than smart and Apple watches – and raises the alarm when readings become critical. The three aspiring soft- and hardware engineers spoke with experts, analyzed markets and developed a prototype. For this, they received ample praise, but also discovered that they still had a long way to go, not least due to the complexity of the approval procedures for medical technology.
“Not every idea immediately sparks a startup,” says Maret Ahonen, 60, the economist heading the Startup Lab at Tartu University that has been hosting the annual Spark Hub since 2015. Creativity, self-confidence and the ability to work as a team are required. “They’re not skills you learn in seminars,” says Ahonen, “so we aim to spark a spirit of innovation.”
And they are succeeding: Some 150 young startups, from financial software to biotech companies, currently employ around 1500 people in Tartu. The Biotechnology Park and the Science Park are like hothouses promoting technical and medical startups. In January, the university opened the Delta Centre, a research and teaching building, in which mathematicians, software engineers and economists share 23 000 square meters of space. Here, too, collaborations with businesses will take place. And for the past four years, founders, entrepreneurs and investors from all over the world have been coming to Tartu in January for Startup Day, the self-professed biggest startup convention in the Baltic region and itself a startup. This year, some 4000 visitors are expected, likely, the city thinks, because the name is stylized as sTARTUp.
On the second floor of the Spark Hub, Joosep Merelaht takes us through a half-empty office loft. Boxes of office furniture are stacked against the walls, and Whippet the whippet is chasing a green rubber ball down the corridors. “A few rooms was all we needed to start with,” says Merelaht, “but now we take up half a story here.” Their company, Fractory, is still young: In 2016, he and his colleagues Martin Vares and Rein Torm submitted their idea to the mentors at the Spark Hub – an online shop for custom steel parts required by industry and the trades. Today, Fractory has 16 employees in Tartu and lately another five in Manchester, England. Numerous companies in the Baltics, Scandinavia and Great Britain already use the platform. Investors at home and abroad have so far poured a seven-digit sum into the startup. “Everything’s moving really fast at the moment,” says Merelaht, “we’re trying to keep up somehow.” In other words, they are trying to grow their product fast before someone else has the same idea. That’s another reason startups need investors they can trust at the crucial moment. But in Tartu it happens fast.
The city has its advantages, says Fractory cofounder Merelaht: low living costs, green surroundings, short distances. “Everyone basically knows everyone else.” That’s useful, especially at the start. Once a company is up and running, there’s no need to move because “thanks to the university, Tartu has enough experts.” And it is also well connected with almost daily direct flights between Tartu and the Finnish capital, Helsinki.
Tartu Science Park
Toome Hill and Cathedral
There’s another creative center near the edge of the city, the Aparaaditehas, or “Whatnot Factory,” where fridge components were produced in Soviet times. Deserted for a long time after Estonia gained independence in 1990, the brick complex now symbolizes a new beginning, housing offices, studios, coworking spaces, restaurants and design shops on three floors. Rents are graduated according to tenants’ income, allowing them scope for experimentation. After all, it can take a few years for an idea to bring in any cash.
Under the roof, there’s a successful young firm that has young men and women working at their computers amid walls hung with charts, tables and photos of farmers and tractors. “We developed software that optimizes farm-work organization,” explains farmer’s son Robin Saluoks, 24, cofounder and CEO of the startup eAgronom. The system helps put more carbon dioxide into the ground so as to cut fertilizer costs. Farmers from Estonia, Latvia, Poland and Romania already cultivate a total of over 700 000 hectares with the aid of eAgronom. Maybe the rest of Europe will soon be using it too.
OUT AND ABOUT IN TARTU
AHHAA is a science museum with a handson approach. Visitors can lift a car with just one hand, for instance.
Tartu is the oldest city in the Baltics and 2024 European Capital of Culture. Find out more at
An open fire welcomes guests to the Lydia hotel, which boasts ample breakfasts and a park view.
Culture replaces conflict: The new Estonian National Museum on the site of an old military airfield.
In January, Lufthansa flies twice daily from Frankfurt (FRA) and three times weekly from Munich (MUC) to Tallinn (TLL). Continue to Tartu by train, bus or car. Use the app to calculate your miles: miles-and-more.com/app