Croatia as a future for startups, after several years of mainly writing about tourism, the world of Croatian startups is fascinating to me and has infinitely more promise.

These young entrepreneurs are new generations, with less stigma from the past and a greater emphasis on entrepreneurship and the future than politics and tradition. The Croatian startup community and corporates can take a step forward and boost their global business positioning. Successful instances of startups valued over a billion euros and firms providing products/services utilized by the world’s most giant corporations tend to reinforce this. However, to generate more meaningful added value for the overall economy in the future, new support systems must be appropriately developed. Recommendations were developed based on the study results and observed patterns.

They should contribute to the continued growth of startup communities and the Croatian digital economy, and this should boost the global positioning of Croatian startups and businesses. According to StartupBlink, Croatia ranked 39th out of 200 countries on the global scale of startup ecosystem growth in 2020, up 11 positions from the previous year. This demonstrates that the Croatian startup scene is growing and getting more diverse, as shown by an increase in startup events and conferences. As soon as the first outliers achieved significant traction in the foreign economy, the general public began to talk about startups in Croatia. Development stages startups are in: One-third of startups have already created a product or service and are gathering business input to improve it.

On the other hand, 50% of startups are in the commercialization process, which means they generate profits, and some are also profiting. More than 57 percent of startups claim their product or service is used by big businesses, indicating the scope for collaboration in enhancing the companies’ corporate operations. Many of the so-called support systems, according to the respondents, may benefit from further development. Since support processes are critical to any enterprise, poor management of support processes will result in substantial financial losses for any organization.

As a result, they must be carefully managed and optimized, providing an incentive for entrepreneurs to assist big corporations with their solutions. 12 According to the report, most startup products/services can enhance market processes such as distribution, information and communication technology, logistics, and infrastructure. External funding/investment sources: The estimated amount of funding in startups under consideration exceeds EUR 42 million.

However, if we exclude an outlier contribution (which is significantly higher than the others), the overall investment amount is around EUR 25 million. If we exclude the outlier funding, the total investment per startup was about EUR 400,000. In 2016, for example, venture capital investments in startups in Croatia totalled between EUR 10 and 20 million. As a result, while there has been a substantial uptick in funding, it remains smaller than the overall level of investment in venture ecosystems in the early stages of growth.

Average monthly revenue: When we compare the revenues produced by startups before and after March 2020, we can see that after March 2020, a more significant number of startups generated a monthly income of less than EUR 10,000. Before March 2020,61, percent of startups reported monthly sales of less than EUR 10,000, while this increased to 71 percent of startups after March. As a result, it is possible to say that 10% of startups see their financial position deteriorate. Globally, 74% of startups have seen a decrease in sales. Although these statistics show a markedly negative pattern in sales and can be discouraging, the revenue loss in most cases is less than 20%.

From this vantage point, the actual financial damage, both in Croatia and globally, is not as severe as expected at the start of the pandemic. The Croatian startup community and corporates can take a step forward and boost their global business positioning. Successful instances of startups valued over a billion euros and firms providing products/services utilized by the world’s most giant corporations just tend to reinforce this. As a result, you can be confident that they can contribute significantly to your market. Since labour costs are considerably lower, SGS takes advantage of the opportunity and reduces the cost of operating for clients by up to 60% whilst providing next-generation quality managed services to the industry. SGS is driving productivity and effectiveness in this area by providing added value.

Author: Karolina Vujnović

Sources:
https://investcro.virtualna-tvornica.hr/wp-content/uploads/2020/12/Digital-Footprint-Report-8-Dec-2020F.pdf 
https://investcroatia.gov.hr/en/research-on-the-transformation-of-croatian-start-ups-and-companies-in-new-market-conditions/