Over the years, we have helped companies apply for quite a number of Estonian Business and Innovation Agency development grants, and to be honest, this is one of the smaller grants we work with. So why are we writing about it at all? The reason is simple – even though the support amount is relatively modest (up to €35,000, with a total project size of around €50,000), it is one of the best ways for both early-stage and more advanced companies to quickly prototype their ideas. It is a very user-friendly funding measure, with a significantly simpler application process compared to larger grants, and it enables companies to create a real, tested prototype that can serve as a foundation for future investments or funding. For this reason, the development grant is one of the most underrated, yet highly practical support measures available in Estonia.
Most recently, we helped Gruff Technology successfully apply for this grant, securing the maximum support amount of €35,000. The company develops smart Wi-Fi-controlled electrical device solutions that help households optimize energy consumption and reduce electricity costs. Their products – such as smart plugs and DIN rail relays – track Nord Pool electricity prices in real time and automatically switch devices on during cheaper hours and off during more expensive periods. This type of solution can reduce energy costs by an estimated 25%, depending on usage. The company has been operating since 2022, has sold its products in Estonia, Latvia, and Finland, and is steadily moving into a growth phase.
The main objective of the development grant project was to develop and test a functional prototype for the UK market. More specifically, the focus was on a solution capable of controlling household electrical devices – particularly water heaters – based on electricity prices and grid load signals. As a result of the project, a technically functional prototype was to be developed, including hardware, embedded software, a cloud-based control system, and an initial user interface, all compliant with UK technical and regulatory requirements. A key part of the project was to validate the solution within four months through both laboratory and field testing, demonstrating its reliability and accuracy.
The need for the project arose from a very concrete business opportunity. Gruff Technology had an existing partner in the UK who planned to install up to 3,000 devices as part of a pilot project, using electric water heaters as energy storage units. This would help reduce electricity consumption during peak hours and improve grid stability. However, the challenge was that the existing technology was not suitable for the UK market – differences in electrical standards, regulations, and technical requirements meant that the entire solution needed to be effectively re-prototyped. Without a functional and validated prototype, it was not possible to make decisions about large-scale product development or market entry.
The market context strongly supported the project. The smart energy solutions market is growing rapidly, and while Estonia already has several strong players offering price-based energy management solutions, the UK market is still in an early stage of development. Although electricity prices are high and there is a large consumer base, there are few widely available solutions that automatically control household devices based on real-time price signals. This creates a clear market gap, which Gruff Technology is well positioned to enter by leveraging its already validated technology and experience from Estonia.
In summary, this is a strong example of how the Estonian development grant helps companies take a critical next step – moving from an idea to a real, tested prototype and opening the door to a new market. €35,000 may not seem like a large amount (with a support rate of up to 70%), but when used effectively, it allows companies to validate their business model, reduce risks, and prepare for significantly larger investments or expansion.
If you need help with funding applications – whether for development grants, KIK, EIS, PRIA, or international calls – feel free to reach out: karl@haap.ee
