In a groundbreaking move, Google has successfully acquired Photomath, a Croatian startup renowned for its mobile app that solves math problems through pictures. Valued at an estimated 550 million USD, this acquisition marks a historic milestone in Croatia’s startup landscape.
Despite this good news for Croatia´s startup ecosystem, the EU startup landscape has seen funding for venture-backed startups, decline by a 39% in 2023. Dropping from $83 billion in 2022 to an expected $51 billion. This decrease can largely be attributed to a retreat from U.S. investors, who play a significant role in driving funding activity in Europe. Despite these challenges, Croatia’s local and regional VC funds remain strong, presenting opportunities for growth and showcasing the country’s commitment to supporting innovation.
Amidst the changing landscape of European startups, SGS has managed to shine with an outstanding performance in Q2 2023 compared to the same quarter in 2022. Despite the negative outlook on the funding market, the company witnessed a remarkable QoQ revenue growth of 117%. This highlights the opportunities the Covid-19 crisis has unlocked and the growing interest of businesses looking for alternative ways of working and reducing costs positioning SGS as an ideal support for any kind of business.
However, the challenging EU fundraising market also impacted SGS’s efforts, resulting in a 74% reduction in raised funds during Q2 2023 compared to the previous year. Nevertheless, the company’s commitment to responsible financial management and sustainable growth remains steadfast.
On a positive note, Q2 2023 witnessed an impressive client acquisition for SGS, growing its client base from 3 to 11 clients, representing a remarkable growth rate of 267%. This expansion reflects the growing recognition of the company’s brand and the trust clients place in its products and services.
Furthermore, SGS’s diligence in executing its revenue strategy is evident in the achieving of a planned revenue increase of 250% in comparison to the year 2022. With only a slight variance of -0.30% from the planned revenue target in Q2 2023, this minor deviation highlights the company’s impressive growth. Considering we are only halfway through 2023 these numbers leave us excited about Q3 and Q4 and demonstrate SGS’s adjustability to market dynamics and its pursuit of continuous improvement.
In Europe’s challenging startup landscape, the acquisition of Photomath by Google represents a significant milestone in Croatia’s entrepreneurial journey. Adding to the recent success stories of Croatia’s unicorns Rimac Automobili and Infobip, this demonstrates the potential of Croatia as a thriving and innovative startup ecosystem.
SGS’s impressive Q2 performance showcases its unwavering commitment to excellence and adaptability in dynamic market conditions, with remarkable revenue growth and successful client acquisitions highlighting its strong market positioning. Irrespective of funding situations in Croatia or Europe, SGS continues to experience steady growth and continues to deliver an outstanding performance in Q2 of 2023, which serves as a testament to the market’s interest in our DaaS product and services. As we look towards the future, our primary focus remains on achieving our Break-Even point, a major milestone that will significantly reduce our reliance on external investment to cover our burn rate. Once we successfully reach this important goal, we intend to allocate all incoming investments toward the expansion of our Sales and Channel Team, as well as the development of the highly anticipated 2.0 version of our SGS ONE software.
We sincerely thank our investors, clients, and employees for their continued support and dedication, which has been pivotal in our ongoing success, and we are looking forward to the challenges yet to come.
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