HR Tech Startup Funding Scene is on Record High Levels

The latest report from Crunchbase News indicates that funding for the HR tech sector is on an all-time rise, with 260 closed deals this year alone (total value of $3,6b), and 500 done deals last year. This is just a confirmation that more and more companies are dealing with a new way of doing business and that the modern workforce is evolving and transforming. There is an increase of companies seeking new ways of recruiting, hiring, and keeping their workforce while making every penny and cent count. Below is a 5-year graph showcasing the venture funding of HR tech-oriented startups.

Source: Crunchbase News

In the first two weeks of this month, 17 financing rounds in the HR tech area have been revealed. “You’re simply seeing very competitive rounds,” Adam Boutin, a partner at Capital One Growth Ventures, said. “HR technology has grown quite hot in the last two years or so.”

A “nexus” of events

According to people in the business, several themes appear to be combining to make human resource technology attractive to investors right now.

With the demand for talent only growing, employees expect more employment, making them more challenging to keep. Add to that a pandemic that has fundamentally changed how we work and organizations wanting to update from previous generations of HR IT stacks. Everything appears to be aligning for a huge investment moment.

“I’m not surprised,” said Job van der Voort, co-founder and CEO of Remote, whose latest investment was headed by Accel. “Demand for talent has never been stronger, and the recent year has only hastened workforce changes. Work is entirely backwards, and there is no script for it.”

According to Saad Siddiqui, a principal at Telstra Ventures, everything in human resources is changing from how talent is acquired to training to attempting to establish a business culture where workers no longer meet each other in person.

“This all poses challenges,” said Siddiqui, whose business recently participated in the fundraising of Certn, a Canadian application screening startup.

One of the most challenging issues for organizations in HR IT, according to Siddiqui, is figuring out how to retain their “culture” in the new remote-work era.

“There will undoubtedly be more investment here,” he said. “Everyone has spent the previous 16 or 18 months working (remotely), but no one is having fun. So the question is, how can it be made more enjoyable?”

Faster – Higher – Stronger

This summer alone, three venture financing rounds in the HR tech sector exceeded $200 million. Workers, headquartered in Austin, raised $300 million in June, while Eightfold, based in Santa Clara, California, and Gympass, based in Brazil, closed $220 million Series E rounds last month.

Boutin, whose firm also participated in the Eightfold raise and is an investor in the San Francisco-based automated skills-based assessment platform CodeSignal, believes that the introduction of machine learning and AI has been a game-changer for HR tech in recruiting, retention, and performance management.

This is especially true since firms recognize the importance of their employees more now than in the past.

“Companies have traditionally seen human resources as a cost center,” he explained. “Because it didn’t increase sales, they didn’t want to spend money there.” However, more individuals recognize that people are to their advantage.”

Companies are trying to figure out how to “fish for talent in different ponds” to get that “people advantage,” according to Boutin, by using technology to help figure out what candidates may be a good fit for jobs based on their skill set rather than just the job they may have applied for through an overly simplistic online search.

The growing demand for greater diversity and inclusion is also forcing organizations to discover new methods to locate and engage with talent.
Finally, HR departments will be searching for technology that will help them streamline procedures for the remote — or fluid — workforce.

“The onus is on us to make things a lot simpler in this fluid workforce,” he added. “It is the HR department’s responsibility to make this work in this new environment.”

Regardless of how firms depart, more M&A and IPOs will increase investor interest in the area.

“As investors begin to see profits, it becomes simpler to double down, and values just rise,” Siddiqui explained.

Scalable Global Solutions is a Tech DaaS [Department as a Solution] provider that enables clients to hire the best of the best Croatian workforce and build whole departments in Zagreb, Croatia. With a revolutionary combination of Workforce and Software as a Solution, we bring something new to the market.

Right now, we are in our second fundraising round, Seed level, where we want to boost our Sales and Marketing team and expand our Channel Program. Our goal is to raise €5M by the end of 2022, with €250k already invested. For more information, please visit our Investor’s Corner.

Source : Crunchable News

An investment in knowledge pays the best interest, said Benjamin Franklin. Before investing or taking an interest in a certain investment it is advantageous to take into consideration a few factors because some features can contribute to the investment being more or less profitable. One of the key aspects in choosing the right investment type according to personal preferences includes carefully picking up the company which manages costs wisely, allowing the investor to aim for a higher profit in the future, in comparison with some other companies. When considering many facts that affect the costs of operation, especially distinguished are the taxation and location, as the ground of transport and delivery costs, which is important even for the online-working oriented offices. What is currently the best space for making an investment?

The CEE region comprises European countries from Albania at the southeast of Europe to the Baltic Sea at the northwest with Russia as the north boundary, Germany as the west and the Adriatic Sea with Italy as the south border. In 2020 the CEE, along with Russia, showed its power on the market by having a rise of the total value of deals with disclosed value by 11%, despite the number of M&A deals dropping by 16% (Mazars). Moreover, private equity remained exceptionally active in both buyout and exit value, as Lukáš Hruboň described it (Mazars): “Covid-19 is actually creating more opportunities for private equity and financial investors because they generally have sufficient liquidity and HR resources to carry out acquisitions.” In the successful rating, compared to other CEE countries and a few other European states, precede Russia, with total closed deal value in 2020 worth €8bn and is followed by Poland, with total closed deal value the same year worth €7.4bn (Mazers). What makes those countries achieve so well results?

Chief economist for CEE at UniCredit Dan Bucsa said: “Poland and Romania have some of the most diversified fiscal packages worldwide.” Those states are profiting along with other European countries from the fact that Europe has multiform industry and acts in the spectre of numerous sectors such as Automotive industry, Mechanical engineering, Defense industries, Space, Cosmetics and especially relevant at these times, Biotechnology and Chemicals. Furthermore, it is important to point out that the keyword for success in many CEE countries is technology. Avast (Czech Republic), TransferWise (Estonia), Skype (Estonia), Prezi (Hungary) or AeroMobil (Slovakia) – these are a few of many accomplishments that CEE countries achieved and are examples of its strength on the market.

Next to the above-mentioned advantages, it is not surprising that the CEE became one of the most popular spaces for investors to find their opportunities and triumph. As mentioned before, the mega-market that Europe offers will make the business strive for success fast and much more easily than in comparison with other locations. Having well of and affluent countries around, with great traffic connections, the possibilities for targeting desired clients and becoming an enviable competitor on the market are limitless. Being able to hire a well-educated workforce, varying from young and creative people to experienced professionals, for an affordable price, makes the CEE region produce dazzling results with minimum costs of operations. Furthermore, sizably access to funding along with different programs that governments support, as accelerator programs, incubators, co-working spaces, and angel investor funds to support innovation, greatly helps start-ups to flourish.

One of the CEE countries that offers a notable start in Croatia, “one of the great tech success stories of the Adriatic region” (Mazars), whose Infobip in 2020 was the target of the third biggest inbound transaction in the sector of Technology in CEE, and which US’s One Equity Partners acquired for €200m (Mazars). There are many benefits of the Croatian market that will make a start-up become a prosperous business. As an EU member and the CEE state it has all benefits of it, and in some aspects handing even better possibilities: good connectivity with neighbours and other European countries, and non-European states, affordable but first-class workforce, low-prices costs of operation with high-standard solutions and enjoying the process of work with beautiful landscape, delicious food and many other. “Happy employees ensure happy customers. And happy customers ensure happy shareholders – in that order”, said Simon Sinek. With Croatia, you can be assured that satisfaction for all is guaranteed. Would you like to grab a great CEE chance? We are here for you!

Located in Croatia we are striving for the best solutions for our clients while making the best use of available resources. And now we are looking for an individual that looks for something different, with a unique approach and innovative ideas, to keep our growth with advantages for both. It is time to be exceptional!

Visit sgs-daas.com/investment-one-pager to find out more or contact us at www.sgs-daas.com.

There are more than 7.8 billion people on Earth, and this year, only in the USA, 500 corporations generated $13.8 trillion in revenue. With the extension of globalization and a growing number of customers, human needs have never been as varied and enlarged today. Arising population forces us to confront different issues and create fitting solutions. Therefore, every creative idea, up to date invention or original approach is received on the market as the entrance to better tomorrow, with respect, admiration and desire. It is prosperous to take a chance and move forward in such an environment, whether expanding the existing business or founding the company. However, to wend to the desirable direction, beforehand few questions must be taken under consideration:

• How much money do I need for my venture?
• When is the right time to realize my plan?
• What do I need to turn an idea into a desirable product and service?

When starting a business, the location of the potential company will be determined by the focus of the pursuit. That will also affect the price of the founding and the income in the future. Therefore, the location is a significant factor in starting the company or extending the existing one. Following the before mentioned, the CEE, meaning Central and Eastern Europe, is currently one of the most attractive areas in the world to start a company or spread the network in. A little over a decade ago, there were 13 tech companies with a valuation of more than $1billion in Europe, and by 2019, the number increased by 13 times. A few European countries are especially desirable for investing. For instance, Croatia is ranked on The Global Competitiveness Report (2019) as 64th out of 141 countries, with an immensely favourable tax regime for foreigners. To open a business in Croatia or somewhere else will be a minimum cost of starting depending on the location of the company, administrational requirements, working equipment and workforce, and the size of the project that will be established. Hence, savings are a necessity to have a ground for business development. However, other sources are ordinarily used for raising capital, most commonly debt capital and equity capital.

In the time of COVID-19, investment in new business could seem an unstable decision. However, it is not uncommon for specific industries to grow their businesses by the rising demand. Despite COVID-19, the timing for investment could never be better, says numbers that show how deal activity in the first half of 2020 fell just 6% compared with the same period of 2019. Nevertheless, this period introduced different working methods and habits and conducted the companies to create specified documents, customized with the fact that, most of the time, they are presented, shared and signed online, with the lack of personal touch. Therefore, the essential factors which are usually seen in the physical interaction between parties need to be transferred in some other virtual forms.

One of the most critical documents representing the company is the pitch deck.

However, as David Rogier, founder and CEO of online streaming platform MasterClass, said: “You can’t just have a deck and walk through it. It is going to fall flat. Talking over Zoom for an hour with slides is the definition of boredom. Admit that this is awkward and say, ‘Hey, look, I haven’t mastered the craft of pitching over Zoom. It will be boring if I’m just talking for the full hour.'” In the online presenting, it is essential to introduce the listener to the critical material and establish contact with the interlocutor by proposing ideas, discussing the potential outcomes, sharing experiences, etc. To be prudent, a few steps must be done before the presentation.

For future investors, it is essential to know some ground information about the company: what makes the presented company stand out on the market, the potential risk and planned future growth, and the proper legal structure. To point out the advantages of the investment in the company, a few facts and figures can be crucial, such as revenue projections in the growth model, description and functionality of each of the offices, listed strategic partners and locational reach of the operations. Of course, developing a strategy and growing a business initially requires having a vision and thinking long-term. Only with a reliable and solid plan the idea can be spread, ingrained, achieved and most importantly, further developed.

That is the reason why we are here! Our company started its journey not long before the pandemic but established the confident basis for work and growth. Confronted with day to day changes, we adjusted to the situation with various methods and kept our focus on one place – how to be(come) – be here and great and become even better. Thanks to our creative and ambitious team, we are proud to say that we have entered a new development stage, which allows us to reach even more targets. If you are interested in becoming a part of our team and progressing with us, visit our one-pager for details, and contact us to hear more!

REMARK: text with the bibliography is uploaded to the Info Boxes

When starting a business in some countries, entrepreneurs have to choose between different legal forms for their company. In Croatia, for instance, two popular legal forms are d.o.o. (LLC) and d.d. (JSC) companies. While both offer limited liability for their owners, there are significant differences between the two that entrepreneurs should consider when making their decision.

A Limited Liability Company (LLC), or, in Croatian, Društvo sa Ograničenom Odgovornošću (d.o.o.) is a corporation in which one or more legal or natural persons invest in prearranged share capital the fundamental positions with which they engage. The minimum share capital for a d.o.o. is 20,000 kn, which can be invested in items (mandatory auditor assessment), but must be at least 50% in money when forming in money, and the remainder in matters and rights.

To retain the prudential balance sheet structure of the liabilities (source of financing), members of d.o.o. will invest tax-free in d.o.o. money, objects, and rights in unwritten capital (capital reserves) that are not reported in the court register – their must be a social contract on investment. Personal assets of d.o.o. members do not correspond to d.o.o. liabilities.

A limited liability partnership is formed based on a social contract that must be signed by all founders and sealed with a notarial deed. If a company is created by only one person, the company is formed based on a declaration of incorporation signed by the creator in the form of a notarial act. On the day of his entry into the Court Register, he gains legal personality.

On the other hand, a Joint Stock Company (JSC), or, in Croatian, Dioničko društvo (d.d.), is described by the Companies Act as a company in which partners (shareholders) have interests in the share capital divided into shares. A legally effusive individual who acquires legal personality by registering in the court registry is referred to as a joint-stock corporation. Both of the Company’s funds are used to cover its obligations. Shareholders are not responsible for the company’s debts.

A statute is a stock company’s fundamental act. It governs society’s internal structure. The minimum share capital required for the formation of a stock company is kuna equal to HRKZ 200,000.00. A joint-stock corporation is required to have a management and supervisory board, as well as a general meeting.

The key distinction is that d.o.o. has shareholders or owners, depending on the share of the share capital, and the founders are not liable for the company’s responsibilities. While d.d. has management, a supervisory board, and an assembly, the Company is financially responsible for all of its responsibilities.

As of 17th of June 2020., Scalable Global Solutions has successfully made the transition from LLC to JSC. The company capital was increased from 400.000 kunas to 800.000 kunas, and divided into 80.000 shares, with a nominal price per share of 10 kunas. Based on the investments in the company and further business growth, to become more attractive to investors and achieve greater market credibility, Scalable Global Solutions has an intention to accordingly proceed with raising the company capital and number of shares.

One of the advantages of being a JSC is the simplicity of the share transfer process, where the transfer is consumed by the execution of the share purchase/transfer agreement. On the other hand, ownership change in an LLC is more time-consuming, with a lot more bureaucratic procedures involved.

Also, the benefits of a JSC are that they have the stability of existence (not many companies make the transition from LLC to JSC), there is scope for further (and easier) expansion, public confidence, and tax benefits.

Conclusion

While both d.o.o. and d.d. companies offer limited liability for their owners, they have significant differences that entrepreneurs should consider when choosing the legal form for their company. The choice ultimately depends on the entrepreneur’s business plan, the size of the company, the desired ownership structure, and the resources available to meet the legal requirements.

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Sources:

https://www.rtl.hr/zivotistil/edukacija/3591293/razlika-izmedju-dd-i-doo/

https://www.petric-kajic.hr/preoblikovanje-d-o-o-a-u-d-d/

https://savjeti.novac.net/blogovi/razlika-izmedu-d-d-i-d-o-o/

https://www.economicsdiscussion.net/joint-stock-company/advantages-and-disadvantages-of-joint-stock-company/31501

Why You Should Invest Now: Forecasted Industry Growth and Market Analysis

The global SaaS (Software-as-a-Service) market is at an all-time high due to the pandemic, as companies need quick and easy solutions for their businesses, that can be rolled out immediately. The subscription-based model that SaaS offers is shifting the one-time payment model that license software has. Combined with the increasing demand for new tech solutions are the main reasons why SaaS is booming. In 2020, SaaS solutions generated approximately $105 billion, and the upward trend will continue in the coming years, with plans to reach $140 billion by 2022.

Gartner Inc. is suggesting that the global economic downturn has forced companies to cut costs and find solutions that are more affordable, easy to implement, highly adaptable and can be cancelled at any time.

Here are the revenue estimates for the global cloud service market:

The SaaS segment is the largest one in the cloud service market followed by IaaS (Infrastructure-as-a-Service). There are estimates that the SaaS market growth might slow down in the coming years, with plans to grow 12%. However, it will still generate significantly more revenue than its competition.

There are estimates that the SaaS market growth might slow down in the coming years, with plans to grow 12%. However, it will still generate significantly more revenue than its competition.

The following table presents the largest SaaS companies today ranked by their current market capitalization in $B.

The list does include Microsoft nor Oracle as most of their revenue comes from selling on-premises software.

All these established companies, and newer companies as well, often choose to re-direct their profits in the company, for further growth and market expansion and they do not pay out dividends. The re-directed profit is reflected in a rise in the price share and capital gains for the investors.

Sources:

https://www.datapine.com/blog/saas-trends/#:~:text=A%20Betterbuys%20report%20reveals%20that,significantly%20in%202021%20and%20beyond.
https://www.bmc.com/blogs/saas-growth-trends/
https://www.information-age.com/public-cloud-revenue-to-grow-6-3-in-2020-gartner-123490499/
https://www.gartner.com/en/newsroom/press-releases/2020-07-23-gartner-forecasts-worldwide-public-cloud-revenue-to-grow-6point3-percent-in-2020
https://finviz.com/

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/

The role of location advantages in company profitability: the case of Croatia.

The importance of location and distance was known since the rise of civilizations. When the urbanization process spanned most parts of the northern and southern hemispheres, people started to be harshly aware of the still accepted fact – the location makes the difference. The question is, what differences does Croatia offer?

Plenty is the word that would describe it as the briefest. However, at SGS, the quality comes first and the speed after that. When urbanization started to be the science at the beginning of the 20th century, many questions and theories arose.[1]

One of them was Christelle’s Central Place theory that supported the idea of the cities spread into space. Depended on one of another as the points of the geometrical shape, where cities’ size would vary on their hierarchy range, and top of the hierarchy would be the cities that held the most important functions for the society[2]. Why was it essential to study the arrangement of the cities? The economy exists on the ground principle of the input and output model, without which it would not remain, nor economy, not society. Therefore, it is the main goal for the buyers to have easy access to the goods and sellers to sell their goods with minimum costs of operations for the maximum price. It is known that, in most cases, what the distance is further, the costs are higher, not only for the seller but also for the buyer. Overall, it is not convenient to sell chicken eggs from other parts of the world, especially if you have a local concurrent. Many theories were developed to be highly efficient in their functions, such as Burgess’s, Hoyt’s and Ullman’s Urban Area Models[3]. Only when familiar with the city’s importance and its development can it look at the bigger picture – the state.

Croatia built out of many cities, villages, and landscapes, including mountains, hills, valleys, beaches, islands, and many more. Croatia is the state thanks to which the particular type of landscape got its name, and it’s called – Doline & Polje – which are landforms of karst. Not only does Croatia have 718 islands, 389 islets and 78 reefs, but it is rich with 18 big harbours along its 5.835,1 km long coastline [4], and they can receive a container, liquid, bulk cargo etc. [5], it also has 50 marinas that attract numerous tourists, business people and see-lovers [6]. Through Croatia passes a few essential European corridors connecting Baltic and Adriatic, Main and Dunav and Budapest with southwest Europe, which is only when talking about land traffic! Croatia is in the southeast of Europe, yet in the middle of it, with countless possibilities of connection, open to countries of east and west, is only 22nd on the list of all European countries considering the costs of living, [7] which makes Croatia highly affordable to invest in and enjoy. It offers low prices of operations, but it ensures businesses, quality and comfortable life, and many possibilities for spreading the ideas since it has well-educated people and many experienced individuals. With a little more than 4 million citizens, it has more than 20 private Colleges and more than 10 Universities that collaborate with Hungarian, German, Austrian, Italian and many more European and Asian Universities for decades. Already the ancient Romans met the beauties and values of Croatian territory, and in the 19th century, Croatians island Vis is considered the Gibraltar of the Adriatic. [8]

Now is the time for new daring and ambitious conquerors to find their treasure gold in here!

SGS is stationed in Croatia to hand the clients admirable solutions for an affordable price. Our workforce consists of skilled and accomplished enthusiasts who are ready to strive for their best. Our location allows us to be at the reach of the hand to Budapest, Ljubljana, Vienna, Munich, Venice and many more. We are focused on technological development and the usage of state-of-the-art programs. Nevertheless, we are connected with our clients, both concerning the physically and the virtual distance. That makes us reliable, trustworthy, and profitable. The great thing is, if you are ready to achieve, even more, we are looking for a partner that will keep growing with us! Will you grab the chance?

Visit The One Pager and find out more.

Sources:

[1] https://www.sciencedirect.com/topics/earth-and-planetary-sciences/urban-geography
[2]https://www.amazon.co.uk/Economic-Geography-Contemporary-Introduction-2007-06-25/dp/B01FJ0HNGO
[3] https://geography.name/urban-geography/
[4] https://www.searates.com/maritime/croatia.html
[5] https://www.lexology.com/library/detail.aspx?g=51aeefec-2770-409c-a773-21c76ddfa265
[6] https://www.croatia-yachting-charter.com/en/destination-guide/marinas-in-croatia
[7] https://www.numbeo.com/cost-of-living/rankings_by_country.jsp?title=2018®ion=150
[8] http://www.croatianhistory.net/etf/britain.html