Startup Sauna Puts #estonianmafia to Test

Startup Sauna has nothing to do with a health spa. This is a non-profit accelerator from Finland, sponsored by Aalto University. Its goal is to kick-start tech entrepreneurship in Northern Europe and Russia.

To select startup teams for its 6-week intense training programme, the accelerator conducts a series of Startup Sauna Warmups at various locations. Today Ville Simola and Antti Ylimutka from Startup Sauna are putting the Estonian Mafia to the test.

Estonian Mafia is a code word for an Estonian startup community (twitter hashtag #estonianmafia), which is gaining visibility on a global scale. According to Jüri Kaljundi, a well-known figure on the Estonian startup scene, the term was coined by Dave McClure when he was trying to make sense of Erply and Zerply, two Estonian startups. Erply is taking on Square with mobile payments and an inventory management system for small businesses. Zerply is about professional networking done right.

Estonia produces a disproportionate number of startups per capita, which can be seen on this slide shared by Robin Wauters during Seedcamp Week, where four Estonian startups presented and two became finalists. GrabCAD, the winner, is a mechanical engineering community and a marketplace, while Sportlyzer is an online training advisor.

The main reason why Estonia has so many startups is Skype, which proved that a revolutionary technology can originate in a small country. Besides, Skype made its founders and key employees wealthy, and hungry for more success. According to Kaljundi, Ambient Sound Investments, a venture fund created by ex-Skype founders and engineers, is relatively slow to fund local startups at the moment, but the individual partners invest on their own account. Kaljundi’s company Utopic, a visual bookmarking and content discovery tool, has Ahti Heinla as an investor.

Meanwhile More Estonian companies are pushing their way into the international markets. produces robots that act as made-to-measure mannequins to try on clothes, reducing costs of returns and exchanges for online retailers such as Otto and Barbour.

Pipedrive is a deal management tool developed by sales people for sales people.

Zeroturnaround, voted the Estonian innovator of 2011, makes developing on Java more productive by allowing users to compile code immediately.

Edicy is an online website building tool, which works best for multi-lingual websites, and has Toivo Annus (Skype co-founder) and Märt Kelder (ex-employee of Skype) on its advisory board.

Fortumo, founded in 2007, provides mobile payment solutions in 60 countries. It won the Estonian entrepreneurship award in 2011.

Startup Sauna has just announced the winner of today’s competition, which will join Russian, Finnish, Lithuanian and Polish teams at Aalto Venture Garage this month. The winner of the Demo Day will then proceed to a tour of Silicon Valley to raise investment capital, find partners and further promote its business.

Today’s winner is Qminder, which provides a queue management system on smartphones. The startup came out of Garage48, aiming to save waiting time for example, at the bank or post office. Hopefully we will soon see them joining the ranks of the Estonian Mafia conquering the world. For now they are off to Helsinki.