How Estonia Became a Sauna Manufacturing Powerhouse

Many of the premium saunas, heaters and sauna woods sold in the United States are made in Estonia. The heater, the wood, the cabin, the smart controller: increasingly, all of it traces back to a country smaller than New Hampshire and Vermont combined, with a population of 1.37 million.

Estonia is now home to a cluster of export-driven sauna manufacturers. Thermory, which calls itself the world’s largest manufacturer of thermally modified wood, posted EUR 149 million in revenue in 2022. HUUM, the Tartu-based heater company, increased its revenue more than eightfold between 2019 and 2022. Saunum Group took its patented air equalization technology public on Nasdaq First North in Tallinn. And several of these companies are shipping into US warehouses and distributors from Buffalo and Houston to the Chicago suburbs.

This is not a fluke. And it is not temporary. It is the result of specific structural advantages that no other country replicates in combination: cheap labor inside the EU, vast forests, zero corporate tax on reinvested profits, a UNESCO-inscribed sauna tradition, and one of the most startup-dense economies in Europe. Finland has dominated sauna manufacturing for a century. Estonia is coming for that crown, and the growth numbers are on its side. Here is how it happened and what it means for American sauna buyers.

Thermory sets the pace at EUR 149 million

Thermory AS is the anchor of Estonia’s sauna industry. Founded in 1997 by Meelis Kajandu as Brenstol, the company built its business on thermally modified wood and renamed itself Thermory in 2017. The real inflection point came in 2018, when Thermory merged with Ha Serv, which the companies described as Europe’s largest manufacturer of sauna materials and ready-made saunas. Ha Serv owned the premium Auroom brand. PricewaterhouseCoopers Advisors and Deloitte Advisory supported the deal. Livonia Partners, the pan-Baltic private equity fund that had invested in Ha Serv in 2016, became the merged company’s largest shareholder.

“We have been competitors for over 20 years,” Kajandu said at the time. “Together we can think bigger and faster develop our various business lines.”

The combined entity scaled fast. The merged company said its revenue was approaching EUR 70 million by the end of 2018 and that it employed more than 500 people. Thermory then acquired 100% of Finland’s Siparila Oy (adding four production units and 130 employees), took full ownership of Latvian sawmill VMS Timber in January 2022, and invested EUR 7.5 million in a new thermal complex at its Loo plant near Tallinn that doubled thermowood capacity there. In 2022, the group reported EUR 149.3 million in revenue, EUR 10.1 million in operating profit and an average of 742 employees, with production sites in Estonia, Finland and Latvia. More than 90% of production is exported.

For American buyers, the most relevant piece is Thermory USA, which lists its office in Batavia, New York, near Buffalo. The subsidiary sells the group’s wood in the US and Canada from warehouses in Buffalo and Houston; Thermory’s annual reports show its second warehouse moving from Denver to Houston in 2024. Thermory’s Sauna Squares, square-profile outdoor saunas made from thermally modified Nordic spruce, mark the company’s push beyond raw materials into finished sauna products, and Thermory USA offers them with HUUM or Homecraft heaters. Thermory’s North American network is now the incumbent benchmark for a newly localized Finnish competitor: Lunawood opened a thermowood production mill in Cleveland, Georgia and launched a US hardwood collection through its 2025 Atlanta Hardwood joint venture.

Auroom: where saunas become architecture

The Auroom brand, now fully within Thermory’s group, operates as a distinct premium division from its production facility in Vana-Kastre, Tartu County, and a second Estonian factory in nearby Torvandi that opened in 2024. Auroom occupies the luxury tier. Its designer saunas were created with Italian designer Luca Donazzolo, and the range runs from the compact indoor Cala and Baia models to the flagship outdoor Natura and exclusive QUU series.

What sets Auroom apart is the bespoke ratio: the company says 60% of its production goes to bespoke sauna solutions. Every sauna undergoes trial installation and quality control before shipping, a process we explore in detail in our analysis on modular saunas and what they mean for commercial builders in America. The brand serves high-profile hospitality clients including Six Senses Crans-Montana in Switzerland and Ryokan Shizuku Hotel in Japan, where each of the 14 guest suites has a Cala Glass sauna. Auroom says its saunas are sold in more than 30 countries.

Because Auroom draws materials directly from Thermory’s own thermally modified wood supply (thermo-aspen, thermo-spruce, thermo-alder), the value chain is vertically integrated in a way few competitors can match. If you are shopping for a luxury sauna with hospitality-grade build quality, Auroom is one of the names that keeps coming up.

HUUM: revenue up more than tenfold in five years

HUUM may be the purest expression of Estonia’s design-meets-engineering sauna identity. Founder Siim Nellis is a third-generation stove builder. His grandfather Paul Nellis was a master stove-setter who also built sauna stoves. Siim wanted a more modern heater, and in 2011 he turned to the Estonian Academy of Arts, where product design students proposed new designs. The winning concept, a wall-mounted round heater inspired by a water drop, came from Mihkel Masso, whom HUUM credits as the designer. By 2012, the design was production-ready. It became the DROP. HUUM says the DROP beat its first-year sales target by 400%.

The financial trajectory is remarkable for a hardware company. HUUM OÜ, the manufacturing company, had revenue of about EUR 1 million in 2019, according to its annual reports filed with the Estonian Business Register. Then the pandemic hit, and home sauna demand jumped: revenue more than doubled in 2020 and reached EUR 8.5 million in 2022, more than eight times the 2019 figure. HUUM Sauna OÜ, the export company that sells mainly into North America, grew from about EUR 530,000 in revenue in 2020 to EUR 5.7 million in 2022. HUUM OÜ’s 2024 accounts first showed EUR 14.7 million in revenue and a 7% profit margin; a later restatement cut that to EUR 11.2 million and a small loss.

For US buyers, one specification stands out. HUUM’s electric heaters carry SGS’s listing mark rather than UL’s, and HUUM’s US manual for its UKU controller allows a setpoint of up to 230°F. Room temperature at the thermostat sensor of a UL 875-listed electric heater is capped at 194°F. On the newer UKU 4.2, adding the optional bench sensor limits the setpoint to 194°F, read at the bench rather than above the heater. The company now holds three Red Dot Product Design Awards, for the DROP (2015), the CLIFF heater (2021), and the UKU controller (2021).

Production is distinctly artisanal. HUUM says its heaters and controllers are made entirely in Estonia with partner companies. The metal arcs of the DROP and HIVE heaters are individually cut and bent rather than made on an automated line, and the UKU smart controllers are produced by partner Oshino Electronics Estonia, based in Parnu.

Saunum Group: sauna science on the stock exchange

Saunum Group trades on Nasdaq First North in Tallinn, an alternative growth market operated by Nasdaq for smaller companies. It is not the same as a main-market listing like Harvia’s on Nasdaq Helsinki, but it gives Saunum public-company visibility and access to capital that most sauna startups lack. Founded in December 2014 by Andrus Vare, Lauri Meidla and Lauri Paeveer, the company developed a patented air equalization system in collaboration with Tallinn University of Technology.

The technology draws hot air from the sauna ceiling and blends it with cooler, fresher air from the floor, then distributes the mixed air at floor level. In the test Saunum publishes from its Tallinn University of Technology work, the head-to-foot temperature gap fell by about two thirds with the system running. Saunum says Himalayan salt spheres inside the device add salt ions to the air, and it markets the system as five sauna types in one.

Saunum listed on First North in December 2020. Revenue grew from $2.4 million in 2022 to $4.1 million in 2023 (a 68% increase) and was about EUR 3.4 million in 2025, according to the company’s unaudited 2025 figures. The company has been consistently loss-making but the trajectory is improving: losses narrowed from $1.8 million in 2022 to roughly a quarter of a million euros in 2025 in the unaudited figures, about 77% smaller than the 2024 loss of EUR 1.1 million.

Saunum sells to US customers through a dedicated US online store. The company won the Interbad 2022 Most Innovative Product award in Stuttgart and a Golden Wave 2024 award for technical innovation. For American sauna builders looking for a climate management system to add to an existing sauna, Saunum sells its AirSolo heat-equalizing units for rooms with an electric or wood-burning heater.

Perhaps the most telling endorsement comes from Finland itself. Lassi Liikkanen of Saunologia, one of Finland’s most respected sauna researchers and consultants, has spoken favorably about Saunum’s climate equalization technology in his reviews. For a Finnish sauna purist to speak well of Estonian-made equipment says something about how far Estonia’s engineering credibility has come.

The emerging wave: Haljas, SaunaLife, and the volume tier

Haljas Houses, founded in February 2021 in Elva, Tartu County, by a small team of Estonian engineers and designers including Otto Taht, produces architecturally striking octagonal saunas featuring double-glazed mirrored glass: see out, but nobody sees in. Every unit is factory-built at the company’s Estonian workshop rather than assembled on site. Its Hele Single won a Red Dot Product Design Award in 2022.

Despite just five employees, Haljas has built an international reseller network that includes the US, UK and Australia. Revenue grew from about EUR 57,000 in its first, partial year (2021) to about EUR 600,000 in both 2023 and 2024, according to its annual reports. In the US, the two-person Hele Nano lists for about $14,000 before freight. These are statement pieces for high-end residential projects.

SaunaLife represents the other end of the Estonian spectrum: accessible, high-volume, and built for the North American backyard. The brand’s lineup runs from affordable X-Series indoor kits to the G-Series fully assembled outdoor saunas and the popular EE-Series barrels. Estonian brands also turn up at US trade shows: at the International Pool | Spa | Patio Expo in Dallas in November 2024, Auroom showed seven of its designer saunas with its US distributor, Bathing Brands.

Why Estonia? The structural advantages

Estonia’s sauna manufacturing success rests on a convergence of factors that no single competitor nation replicates.

The raw material base is extraordinary for a country this small. Estonia’s wood industry exports about EUR 3 billion a year, and the country is Europe’s largest exporter of prefabricated wooden houses, according to Trade with Estonia, the state’s export promotion site.

The 0% corporate tax on reinvested profits, in place since 2000, is a genuine competitive weapon. It allows manufacturers to aggressively reinvest in capacity and technology without immediate tax drag. Thermory’s EUR 7.5 million thermal complex at Loo and Saunum’s R&D collaboration with Tallinn University of Technology are both easier to fund when reinvested profits are not taxed.

Then there is the digital culture. Estonia produced Skype, Bolt, Wise, and Pipedrive, and Startup Estonia, the government’s startup program, ranks the country first in Europe for unicorns per capita. That startup DNA shows up in how even traditional manufacturers think. Saunum patented its air-blending system. Thermory runs paperless production at Auroom.

Geographic concentration amplifies everything. HUUM, Auroom’s two Estonian factories, Thermory’s Reola sauna-materials plant and Haljas are all in Tartu County, and Iglucraft builds its saunas in neighboring Viljandi County, putting much of the industry within short drives of each other.

Cultural credibility that money cannot buy

In November 2014, UNESCO inscribed the Voromaa smoke sauna tradition, recognizing bathing customs, whisk-making skills, sauna construction, and meat smoking practiced by the Voro community in southeastern Estonia.

Then came the documentary. “Smoke Sauna Sisterhood,” directed by Anna Hints, premiered at Sundance in January 2023, won the Sundance Directing Award for World Cinema Documentary, and took the European Film Award for Best Documentary. It earned a 98% score on Rotten Tomatoes. The film brought global visibility to Estonian sauna culture at precisely the moment when international demand was surging.

Celebrity helped too. David Beckham purchased an Iglucraft igloo-style sauna, built in Leie village, Viljandimaa, for his Cotswold estate and thanked the company in a post to his more than 52 million Instagram followers. The EUR 14,000 sauna (about $16,000 at the time) generated coverage across UK and Estonian media.

In October 2026, HUUM, Auroom, Leil Saunas and DWILD turned that reputation into a shared quality mark, launching the Estonian Sauna Trust at Interbad in Stuttgart.

How Estonia stacks up against Harvia

Harvia, the Finnish sauna giant on Nasdaq Helsinki, reported EUR 175.2 million in revenue for 2024 with approximately 700 employees, and its shares had a market value of about EUR 800 million at the end of that year. Harvia’s North American revenue alone reached roughly $67 million, several times the combined revenue of HUUM and Saunum. For now.

Estonia’s largest player, Thermory, reported EUR 149 million in 2022 revenue, close to Harvia’s scale. But most of Thermory’s business is planed wood such as decking, cladding and sauna paneling; finished saunas, sauna elements and small houses made up about 10% of its 2022 sales, according to its annual report. In pure sauna equipment, HUUM’s manufacturing company, at about EUR 11.2 million in restated 2024 revenue, and Saunum, at about EUR 3.4 million in 2025, remain small relative to Harvia. But the growth rates tell a different story: HUUM OÜ’s roughly 104% compound annual growth from 2019 to 2022 dramatically outpaces Harvia’s long-term target of 10% average annual revenue growth. At that pace, Harvia’s lead is not the fortress it looks like on a spreadsheet.

Here is the uncomfortable truth for Finnish incumbents: Estonia is doing what Finland did 40 years ago, but faster, cheaper, and with better design instincts for the modern market. Finnish companies built the sauna industry on tradition and engineering. Estonian companies are building on the same tradition, the same engineering talent pool, and a cost structure that gives them room to invest aggressively while still undercutting Finnish prices. Harvia’s scale advantage is real, but it will not by itself protect anyone from a competitor that grew its revenue more than eightfold in three years.

The consolidation wave adds another dimension. KLAFS (Germany) was acquired by Kohler in January 2024 for an undisclosed sum, bringing its 850 employees and premium positioning under one of the world’s largest kitchen and bath companies. Sauna360 (formerly TyloHelo) was acquired by Masco Corporation in 2023 for about EUR 124 million, net of cash acquired. When major consumer goods companies are paying these prices, Estonian innovators start looking like attractive acquisition targets. And unlike the companies that got bought, the Estonian ones still have founder energy and growth-stage economics.

The tariff reality for US buyers

Estonian sauna exports to the US face a turbulent tariff environment. In April 2025, the Trump administration imposed reciprocal tariffs on EU goods under IEEPA. The 20% EU rate announced that month was suspended about a week later in favor of a 10% baseline, and the rate settled at 15% under the July 2025 framework agreement. Section 232 tariffs on wood products, effective October 2025, added further duties on timber imports.

Then the law shifted. On February 20, 2026, the US Supreme Court ruled 6-3 in Learning Resources, Inc. v. Trump that IEEPA does not authorize the president to impose tariffs, opening the way to refunds of the $166 billion collected under it. Within hours, the White House imposed a replacement 10% uniform tariff on all imports under Section 122 of the Trade Act of 1974. That tariff applies to every country equally and expires July 24, 2026, unless Congress extends it. For Estonian manufacturers, the current 10% rate is lower than the old EU-specific 15%, but the uncertainty is worse. Nobody knows what comes after July. Estonia’s labor cost advantage partially offsets tariff friction, but the US market is significantly more complicated than the tariff-free European single market.