Estonia's startup surge: The small nation redefining defence

Estonia stands out in Europe for the number of startups being established. On average, there are more per capita than in other European Union countries. Among them, many startups operate in the defence sector. For various reasons, these need to operate at a unique pace, especially given that threats from Moscow directed towards the Baltic states are nothing new. However, the solutions they create are targeted not only at the Estonian army.

Estonia is the smallest Baltic country, with an area of just over 17,000 square miles. As of 2024, it is home to 1,374,687 people. For comparison, data from 2024 indicates that Warsaw has 1,861,599 official residents. Despite its small size, the country is consistently strengthening its national defence and security system. Already, Tallinn allocates 3.2% of its GDP to defence and plans to increase this figure to 4% within two years. This approach places Estonia at the forefront of NATO countries in terms of GDP allocation to defence.

An important pillar in building national security is the startups operating in the defence sector. It is not without reason that Estonia is called the European startup hub. The "State of European Tech 2020 by Atomico" report showed that, considering the population, Estonia has 4.6 times more startups per capita than the European average. Moreover, they create 2.3 times more jobs than other businesses.

Estonia can already boast several "unicorns," which are startups with a market value estimated at over a billion dollars. Examples include Skype, Bolt, Wise, Pipedrive, and Glia. So far, none of these entities are from the defence sector, but this may change in the future. Estonian startups are fiercely competing for their position, seeking opportunities for cooperation in foreign markets, and the solutions they offer are noteworthy, as I have experienced personally.

One Estonian startup has developed a technology that has aroused particular interest from the Russians. When Milrem's THeMIS combat robots started appearing in Ukraine in 2022, the Kremlin offered a million rubles for the capture and delivery of this platform to the Ministry of Defence in Moscow. When converted, the amount is a little over £8,000.

However, it is worth recalling the sums the Kremlin offered for delivering other Western equipment. For destroying or delivering Abrams or Leopard 2 tanks in 2023, the Russians promised five million rubles, which is about £40,000. Meanwhile, for destroying the first F-16 fighter jet, they proposed 15 million rubles, which is just over £120,000.

THeMIS is one of the most recognisable products of the Estonian company Milrem. This combat robot is actually a small, modular machine based on a tracked chassis with a hybrid drive. It has a space between the tracks where a weapons module or various types of specialist equipment and loads, or even an injured soldier, can be placed. The vehicle, weighing about 1.6 tonnes, does not operate fully autonomously as it requires piloting. However, its use helps reduce costs and risks associated with various missions—from transporting equipment to evacuating wounded personnel.

Another flagship product of Milrem is the Type-X combat robot. It is an unmanned, smaller, lighter (and according to the manufacturer, cheaper) counterpart to combat infantry vehicles, whose main task is to strengthen and support the combat capabilities of mechanised units. This vehicle, weighing 12 tonnes, is also equipped with a hybrid propulsion system and a tracked chassis. It has been designed to be easily modifiable and to mount various kinds of weapon systems.

In 2007, Estonia fell victim to a cyberwar. It was the first-ever large-scale cyber attack on a sovereign country. When Tallinn decided to move the so-called Bronze Soldier from the city centre to a military cemetery, protests from Russians were expected. The monument was a symbol of Soviet soldiers—the "liberators"—but Estonians considered it a symbol of occupation.

However, the authorities did not anticipate such a blow from Russian hackers. Estonia regarded their actions as an act of cyber warfare and attributed the responsibility to Russia. The event lasted 22 days. During this time, the hackers failed to steal any data. Moscow did not accept responsibility for the attack. However, it was a crucial turning point in the cyber security of Estonia and an impetus to create entities that would utilise the knowledge gained on this topic.

One such company is CybExer. A member of its board is Rainer Saks, who served as the director of the office of the president of Estonia from 2006 to 2011. He had the opportunity to see firsthand the actions the authorities implemented during the 2007 cyberwar. During a meeting with journalists, Saks recalled this event while emphasising the role of cybersecurity in today's world. He also explained how CybExer helps build it by offering services through the Cyber Range platform.

Its main task is to train and increase knowledge through the use of so-called digital twins and simulated situations. Exercises on replicated systems and processes later improve the response in the event of cyber threats in real-world environments.

The Estonian defence sector is not only about unmanned platforms and cybersecurity. There are more companies on the market creating solutions tailored to the needs of the Estonian military, but not only. There are entities creating drones, playing an increasingly significant role on the modern battlefield, such as Threod Systems, companies like Maru Defence offering mobile containers for special purposes and support systems for military and humanitarian missions, or companies like DefSecIntel supporting situational awareness through ready-made systems, including fully automated surveillance platforms, autonomous monitoring stations, and solutions equipped with AI-assisted technologies.

Due to its proximity to Russia, lack of its own combat air force, main battle tanks, or a large army, Estonia must focus on innovation, including the potential of startups operating in the defence sector. Especially as threats from Moscow directed at the Baltic states are nothing new. Countries must be prepared for any scenario. Building its military strength is one element of deterring a potential aggressor.

Colonel Mati Tikerpuu, head of one of Estonia’s two military brigades, said in early July in an interview with "El País" that Estonia "would be able to resist a Russian invasion for a few weeks." After that, NATO's intervention would be necessary. It is possible that during those few weeks, solutions created by the Estonian defence industry could significantly enhance the ability to repel hostile attacks. The war in Ukraine has repeatedly shown that the creativity of citizens, innovation, and advanced technologies are allies of victory—if not in the entire war, then in individual battles.