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How Estonian founders take a stand for gender equity in VC funding – a guest post by Invest Estonia

Only 1% of venture capital today goes to companies founded by women. Estonia’s successful female founders are teaming up, speaking up, and stepping up to battle biases in the venture capital space. Invest Estonia explores their success stories and opportunities to boost equal opportunities even further. And if you are ready to join the most competitive tech sector in the region, use ComparEST, their honest, data-backed tool to let you choose where to start your next company.

The venture capital (VC) industry has a diversity problem. In Europe, only 1% of capital is going to women-only founding teams, and somewhere around 4% of total VC funding goes to diverse founding teams.

The Estonian startup ecosystem, known for its agility and high concentration of unicorns, is determined to tackle the problem head-on. In 2022, female and mixed founding teams in Estonia raised 79.5 million euros, or 6% of total investments, while all-female founding teams attracted 7.2 million euros. Aside from Bolt’s record-breaking 628 million euros, all-female teams are at 1%. Still, just in a few years, the proportion of Estonian female founders has increased from 10% to 17%.


Now the Estonian founders of global companies like Funderbeam, Testlio, Jobbatical, Fyma, FoodDocs, Timbeter, Clanbeat,, Grünfin, Soulie, Cachet, and Single.Earth are banding together to take a proper swing at the glass ceiling.


Yes – that glass ceiling is still there

The funding gap in high-growth entrepreneurship is no secret to most women, but many men are still shocked to hear the numbers. Just ask FoodDocs founder Katrin Liivat. Liivat was struck by the uneven distribution of awareness when she and other female founders started wearing T-shirts with the eye-catching slogan We are the f****** 1%, to highlight the underfunding issue.

“At events, people ask me what the slogan means,” Liivat says. “When I explain what the 1% refers to, most men say, ‘No, it can’t be that little.’ But it’s a fact.”

Potential explanations for the funding disparity have included gender differences in technical training or risk preferences. Still, studies are making it inescapably clear that investors are simply reluctant to fund female entrepreneurs: A study published in 2020 found that female-led startups experience significantly more difficulty garnering interest and raising capital from male investors compared to observably similar male-led startups. Overall, the evidence is consistent with gender biases.

Kaidi Ruusalepp is the President of the Estonian Founders Society, the country’s first-ever IT lawyer, and the founder of Funderbeam, a global investing and secondaries platform for investors to buy and sell equity stakes in private companies. A lifelong stereotype-buster, she is also one of the driving forces behind this wave of women speaking up about the glaring gender imbalance in VC funding.

As Ruusalepp points out, it’s beyond any shadow of a doubt that while there is a perception that women-led businesses are somehow, particularly risky or niche, women are building businesses and technologies that are just as hard-hitting as any of the most successful male-founded companies. And they’re doing it with a fraction of the funding the men are getting. “When you look at the companies founded by women in Estonia, we have DeepTech, FinTech, InsurTech – nothing like ‘just another dog walking app’. We run global businesses with global funding from the likes of Union Square Ventures in the case of Karoli Hindriks and Jobbatical, for example,” Ruusalepp says.

“We have all these companies with international reach, but we are underfunded compared to male founders. 90%+ of the venture capital is managed by men, and they invest in similar founders.” Ruusalepp refers to this tendency as cowardly capital. “They don’t feel comfortable investing in something that’s different to where they come from,” she says. “We have to eliminate those biases.”

The potential currently stuck behind gender biases is immense. Against the odds, Estonian female-founded companies have raised somewhere in the region of 100 million euros between them.

“What if we had ten times more funding?” Ruusalepp muses. “Where would we be? Maybe half of us would be unicorns. Maybe it’s worth deploying more than just survival capital to women founders?”

Mentoring is great, but funding is better

So how are women founders supposed to break through the glass when the odds are stacked so firmly against them? In 2022, Tessa Clarke memorably wrote, “Female founders need money, not more mentoring.” Sure enough, there’s no credible, science-backed reason to suggest that women aren’t raising money because they can’t pitch, or because their business ideas are inferior to men’s – the same 2020 study cited above found that the male-led startups that male investors express interest in do not outperform the female-led startups. Quite the opposite: they underperform in comparison.

So while mentoring is great – “We do a lot of mentoring of fellow founders,” Ruusalepp says – funding is needed more urgently. And getting those numbers up from 1% requires attacking the problem from every angle. “We are building successful businesses to bring down the barriers for the next generation of female founders,” Ruusalepp says. “We speak at conferences and to the media. And we’re working towards making successful exits, so that we ourselves have the capital to boost investment into diverse founders.”


We’ve come a long way, but…

A mainstay on the Estonian founder scene, Ruusalepp herself has been at the centre of the startup action here for years, and her faith in the Estonian community’s ability to change the status quo is unshakeable. She hopes that with purposeful action behind the goal, the growth of funding for female founders is going to be exponential, but 10% would be a good start. “We’re also aiming for 10% of all startup revenues in Estonia,” she says. “We’re already not far from that.”

Having brought the issue into the spotlight recently at the Estonian Startup Awards ceremony, along with other founders, Ruusalepp notes that even though the biases are embedded deep into society and individual mindsets, the reaction shows encouraging signs. The community is open-minded and ready for change, but like any big transformation, it will take time and effort. “One of the most difficult things to change is habits,” Ruusalepp says. “VC capital has worked one way for the last 40 years, and changing that is extremely difficult.”


If it were easy, someone would have done it already. But this group of bias-busting founders is rising to the challenge, emphasising that in addition to diversifying the VC landscape, much of the work needs to be done at home and in schools.


“We still have gendered education in our schools,” notes Karen K. Burns, co-founder and CEO of AI startup Fyma. Not much can be expected to change in perceptions as long as children are being raised within dated gender stereotypes that make it harder for girls to pursue entrepreneurship and careers in STEM – male-dominated fields where the environment tends to be more hostile towards women. “From a very early age on, girls shouldn’t be feeling like they are being treated special because they’re doing STEM stuff,” Burns says. “It should just be normal.”

There are plenty of initiatives already chipping away at the problem, and it’s not like these startup founders are starting completely from scratch. HK Unicorn Squad, founded by entrepreneur Taavi Kotka, empowers girls to choose a path in IT. The Tech Sisters non-profit has been encouraging women and girls to do the same since 2013, with their entry-level workshops and networking events. The Challenger Diversity Accelerator, co-founded by serial entrepreneur and investor Triin Kask and mentored by a number of Estonia’s most prominent female founders, focuses on increasing diversity and supporting startups with at least one woman on the founding team.

There is a lot of work already being done to change the biases and perceptions standing in the way of gender equity. It’s the age-old mantra of most seekers of gender equity: “We’ve come a long way. But…”

The onus now largely lies on the venture capital space itself. Estonia’s pioneering 1% do not plan to stop raising the issues, raising funds, and fearlessly nudging VCs to examine the patterns that are holding so much entrepreneurial potential hostage. “As a fund manager, think about where your money is going and why,” Ruusalepp urges VCs to confront and address their biases, whether they’re conscious or not. “Women can take risks, and we can grow the money.”

Katrin Liivat, FoodDocs

FoodDocs was founded in 2017 and raised 2 million euros in 2022 to solve food safety compliance issues. Leveraging AI, FoodDocs makes getting and staying compliant significantly less time-consuming than traditional methods. Founder and CEO Katrin Liivat is a strong proponent of unleashing the full potential of women in the workplace.

With a 50/50 gender split on the FoodDocs team, Liivat has seen first-hand the benefits of gender equity and pushes for it wherever she can.

“Showing women what they’re capable of doing, the energy that comes with that is awesome,” Liivat says. “When I hire women, I see the same pattern that I used to have. They have been under this pressure that says, you can’t do it. Once they’ve understood what they can achieve, it’s like a rocket. Only the sky’s the limit.”

Triin Kask, Soulie

Triin Kask is a serial entrepreneur, angel investor, and co-founder of the Challenger Diversity Accelerator. Kask’s current startup Soulie, the third company she’s led since the beginning of her entrepreneurial journey, allows people to create their own personal algorithm and browse ultra-personalised content as an antidote to mindless scrolling. Kask has raised several million euros for her startups, and 600,000 euros for her latest Soulie, which is set to open its beta to the public later in 2023. Like many women in the startup space, she was initially not convinced there were biases or stereotypes at work in.

the VC world. She simply assumed it was that difficult for everyone. “Now I work with other female founders raising money,” Kask says. “And I see how hard it really is. It’s much easier for male founders to raise money at that stage. So I’ve been working on encouraging other female founders. We started our accelerator and female founders’ meetups, which have been really popular and always overbooked. This ecosystem, from women to women, is working very well.”


Karen K.Burns, Fyma

Fyma founder and CEO Karen K. Burns set out to make AI more accessible in 2019 and closed a round of 1.8 million dollars in seed funding the following year. Burns is an outspoken advocate for gender parity in all spaces and is particularly passionate about using her platform to get more women into STEM and management roles.

“Women raise smaller rounds over longer periods of time,” Burns notes. “That, compounded with being a tech company that spends maybe two years of its life actually building the product, you need to push for profitability and revenue sooner because you will have diluted yourself already.”

The quickest way to a solution, Burns believes, is working more closely with VCs and the men in the industry. “A really easy thing for VCs is to change their pipeline,” Burns says. “Last year, I spoke to an investor who would meet a woman-only or mixed-gender team for every male-only team in his pipeline. Within a year and a bit, his portfolio was 50/50. He changed his bias by eliminating it at the root.” Burns believes that on top of everything else, not funding women-led companies is simply bad business sense. “It’s not just about women getting money,” she says. “It’s about good businesses getting money.”


Anna-Greta Tsahkna, Timbeter

Timbeter digitally transforms the timber industry into a transparent and well-managed supply chain. Founder Anna-Greta Tsahkna set out to increase sustainability, efficiency, and profits for the forestry industry and for governments.

In total, Tsahkna has raised 1.7 million euros for Timbeter to date and has established a firm presence in their main markets in Latin America and Africa. At the intersection of tech and timber – not one but two traditionally male-dominated industries – Tsahkna has felt the imbalance inherent in the system.

“As a female founder on the same level as any male founder, you’re still undervalued and you have to jump higher,” she says. “Female-led businesses are actually on average more profitable but still have more difficulty getting funded. We are so used to having men in charge of the money. It will take time, but I do see that there are more and more VCs who really take into consideration that they need to have female founders in their portfolio, such as Change Ventures, one of our investors.”

Kadri Tuisk, Clanbeat / SageAI

Serial entrepreneur Kadri Tuisk is adamant that her daughter, already a founder at 17 and soon raising funds for her own business, should not have to face the same kind of biases in the VC world that she has.

“I want to create a world where my daughter is able to create the change she is hoping to see,” Tuisk says. “If you’re looking at the companies bringing change in the world and they’re all male-led, you’re not looking at a balanced world.” Tuisk herself is at the helm of Clanbeat, an EdTech startup bridging the student mental health gap.

With her Clanbeat offshoot, SageAI, Tuisk is taking an even deeper dive into how technology can unlock human potential. Born in 2022, SageAI offers highly personalised, AI-powered coaching and learning for delivering results in startups, without burnout.

Merit Valdsalu, Single.Earth

DeepTech startup Single.Earth is disrupting climate action by investing in forests. CEO Merit Valdsalu set out to find alternatives for monetising forests in 2019, after winning a hackathon at which she and her co-founder showed that nature can be commercialised without being sold. To date, Valdsalu’s Single.Earth has raised 7.9 million euros to transform the world economy by introducing the first nature-backed currency.

“I grew up with older brothers and I’ve just been fundraising, so I’m used to being surrounded by men,” she says. “I wasn’t thinking of myself as somehow a different human. But at some point, I realised that it’s just the 1% of women, or maybe a bit more if we’re talking about mixed founders, that actually get funding. That was even shocking to me, and I was already there. Even the women inside the system don’t know how little funding is actually going to them. That needs to change.” Valdsalu hopes to see her children be the first generation to grow up without the biases women face in the business world, and society as a whole. “It should make all the sense in the world to see women as leaders. And we need more female VCs, definitely.”


Hedi Mardisoo, Cachet

Hedi Mardisoo is the founder of Cachet, an InsurTech startup that raised 5.5 million euros and doubled its team in 2022.

Cachet provides solutions for the growing platform economy workforce, projected to account for 1 out of 5 economically active citizens in the EU by 2025. For Mardisoo, one of a very small number of female startup founders in the insurance tech industry in Europe to raise a round of VC funding, the problem of the gender funding gap had been a relatively abstract one, until the numbers simply weren’t adding up anymore.

“When I started to talk to other female founders and saw the numbers, it hit home.” The number of female-founded companies is growing, but investments are not. The solution, as far as Mardisoo is concerned, is a dialogue. “In most cases, people involved aren’t realising the bias in their decisions, as this has been considered a norm in the past. Therefore if we’re not the ones putting it in front of everybody, who will? I think it will be a sign of a healthy ecosystem, where women feel safe and strong enough to bring up these topics.”


Triin Hertmann, Grünfin

Triin Hertmann has helped take household names like Skype and Wise from early-stage to unicorn. Convinced that every technology product should strive to make the world a better place, Hertmann founded Grünfin to focus on investments in climate change, equality, and health.

As the community’s choice for Investor of the Year, Hertmann was the only woman to win a category at this year’s Estonian Startup Awards. With 20 years of experience in the finance and technology world, Hertmann has had a front-row seat to the biases female founders face in male-dominated industries. And she does not shy away from speaking up about it.

“Even if we feel like we are the only women in the room, we have to go and make ourselves heard,” Hertmann says. “Because other women are looking in, and they need someone to show the way. Women are not here to demand special treatment, just something that is fair. We’ve spent too long on the sidelines, thinking things will happen by themselves and that people will understand how it’s beneficial to have diverse investors and teams. But I think we need more of that push.”

Female Founders rocking the Estonian startup ecosystem and building global startups

Karoli Hindriks, Jobbatical

Karoli Hindriks has been an entrepreneur for a solid 20 years. Jobbatical, the tech platform that Hindriks founded in 2014 and successfully pivoted in 2019, makes it 2x faster and 3x less expensive for businesses to move employees from one country to another.

The latest round of funding, 11.6 million euros in 2022, brought the company’s total close to 20 million euros. Last year, Jobbatical tripled its revenue, landing Hindriks in the top 3 in two categories at the Startup Awards: the Revenue Hack and the Founder of the Year. Throughout her career, Hindriks has seen how the VC space treats men and women differently in seemingly small ways that nevertheless lead them on drastically different paths.

“It starts with the questions,” she says. “Men tend to get questions about opportunities and their vision, while women get questions about the risks, and what can go wrong. We don’t need more mentoring for female founders. We need to mentor the VCs.”

Kristel Kruustük, Testlio

One of the very first female startup founders in Estonia to ever raise a round of VC capital, Kristel Kruustük has long been a hands-on investor and mentor on a mission to empower more success stories like her own Testlio, which provides quality assurance, quality engineering, and digital experience solutions.

Kruustük believes that varied perspectives and experiences are what create truly innovative products and services, but that the potential successes of many underrepresented founders are locked away behind barriers like limited networks compared to men.

“Our companies are equally important to companies built by men,” Kruustük says. “Women are tackling significant challenges, and thus, they deserve more funding. While sharing our stories is crucial, we also need to recognise and overcome our biases. At Testlio, we’ve for example also implemented anti-bias hiring training for our managers.”


This article is a guest post by Invest Estonia – an official partner of Latitude59 2023 – originally published in Life in Estonia magazine, Spring 2023 edition. Go here the browse the newest copy of the online magazine.

To hear more about Estonian startup ecosystem and business environment, make sure to visit the Meet Estonia area at Latitude 59 on May 25-26, 2023. The teams of Invest Estonia, Startup Estonia, e-Residency, Work in Estonia, and Trade Estonia are happy to have a chat! See you there!

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