Forget New York, Frankfurt and London. Yes, the world has traditional financial centres – but there’s a new group of cities challenging the status quo. They are the Fintech Frontiers, tearing up conventional wisdom about where in the world a startup should be located. Like the frontiersmen of the Wild West, they are pushing the boundaries of the fintech landscape and shining a light on new cities that deserve to be discovered.
In this series, we take a look at some of the most unexpected and underrated cities playing host to fintech innovation. To kick us off, we’re heading to Tallinn in Estonia.
Estonia working hard to shake off old stereotypes
Doing business in Estonia is incredibly easy. “It takes three hours to establish a company and one or two minutes to file taxes,” says Marek Pärtel, CEO of property finance platform EstateGuru. “Estonia is rated number one in the OECD’s tax competitiveness index and 99% of all public services are online 24/7.”
Since gaining independence from the Soviet Union in 1991, the country has modernised and rid itself of traditional misconceptions. Today, this small Baltic outpost is a member of the European Union, Nato and part of the eurozone. English proficiency is high, and the country’s capital, Tallinn, is a thriving fintech hotspot. It has spawned successful fintechs like Wise, Zego and Veriff as well as emerging players – including Lightyear, the investing app which earlier this month secured €25mn to pursue expansion.
“Estonia has long ceased to be a country of cheap labour and the living costs are getting higher, but compared to large European cities and tech hubs like Berlin or London, Tallinn is still very much affordable,” says Kalli Kulla, Head of Marketing & Communications for Tuum.
Tallinn-based Tuum is on a mission to build a next-generation core banking platform. It was called Modularbank until 2021, when it rebranded, choosing the Estonian word for ‘core’ in recognition of its roots. Tuum was founded in 2019 by a group of experienced IT experts, who got together at software development firm Icefire, which was eventually sold to Checkout.com, whose CTO, Ott Kaukver, is an Estonian formerly of Wise.
Estonia home to a ‘tight-knit’ fintech community
In Estonian business, everything comes full-circle eventually. “All those stories of signing deals on your phone from the sauna or filing tax in minutes are actually true,” says Single.Earth CEO Merit Valdsalu, who describes Tallinn’s fintech scene as “supportive and very close-knit”.
Founded in 2019, Single.Earth is seeking to reward landowners for preserving forest. Founders Merit Valdsalu and Andrus Aaslaid were introduced to each other by a mutual connection – Ragnar Sass, one of the founders of Estonian unicorn Pipedrive. Single.Earth has launched a digital currency called Merit, which is directly linked to the amount of CO2 sequestered in landowners’ forests.
It is, perhaps, an idea that could only come from Estonia: the country is 56% forest, the equivalent of 2.2mn hectares.
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