This new initiative builds upon the resounding success of its predecessor, the EUR 35 million Croatian Venture Capital Initiative (CVCi 1), which made its debut in June 2018. The inaugural program facilitated the establishment of Croatia’s first institutional-grade venture capital fund, complete with a dedicated acceleration compartment that has supported over 100 start-ups in their pre-revenue stages to date. CVCi 2, with a formidable financial foundation of EUR 60 million from the ERDF-funded Programme Competitiveness and Cohesion 2021-2027, supplemented by an additional EUR 20 million, sets out to further elevate Croatia’s venture capital and innovation ecosystem.

A distinguishing feature of CVCi 2 is its collaborative approach, as it does not make direct investments in start-ups. Instead, the initiative delegates such investments to selected independent, private investment teams. These teams, chosen for their expertise and vision, not only handle the deployment of funds but also actively seek additional capital from a diverse range of investors, thereby amplifying the impact and reach of CVCi 2 in the Croatian entrepreneurial landscape.

All fund managers can apply on the EIF website, please click here for more details.

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The main goal of this program is deeply rooted in encouraging the development and strengthening of private equity fund management companies, which direct a significant part of their investments to support fast-growing Croatian small and medium-sized enterprises, smaller medium-sized enterprises and medium-sized enterprises.

The total value of this program is an impressive EUR 52 million. This amount is divided between the Croatian Bank for Reconstruction and Development (HBOR) and the European Investment Fund (EIF), each providing EUR 26 million. Furthermore, this initiative is expected to attract additional funds from private investors who will invest in growth capital funds. Together with funds from the program, these funds will stimulate financial support for innovative and ambitious projects.

HBOR’s funds for EUR 26 million are financed from the Recovery and Resilience Facility under “Next Generation EU”, which clearly shows the connection of this project with European efforts to stimulate recovery and growth.

On the other hand, the European Investment Fund (EIF) published a Call for Expressions of Interest intending to select financial intermediaries, i.e. growth capital fund management companies, that meet all the necessary conditions for access to funds available within CROGIP II.

The deadline for submission of expressions of interest is set for 31st December 2023, providing an opportunity for all relevant stakeholders to get involved in this significant project aimed at stimulating economic growth and development in Croatia.

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AGRIVI, airt, Amodo, Ascalia, BiteMe Nutrition, Cidrani, CircuitMess, Codemap, Elevien, Farseer, Identyum, Legit, Mediatoolkit, Mindsmiths, MIRET, MobilityONE, Orqa, Productive, Robotiq.ai, Sportening, Sportreact, STEMI, Talentlyft, Treblle and Wasp

Croatia also has two unicorns, Infobip and Rimac, and approximately 30 scaleups which could not be nominated for this Top25 Startup list. The criteria defining scaleups include meeting one of the following: employing more than 100 employees, more than HRK 100 million in revenue, or more than HRK 100 million in realised financing round.

Croatia is home to approximately 1000 startups, and the shortlist proposed by the jury members included 120 startups, from which Top25 startups were selected.

The jury members included representatives of the Croatian Private Equity and Venture Capital Association (CVCA) members: Fil Rouge Capital, Feelsgood Capital, South Central Ventures, VentureXchange, as well as CVCA’s President, Mirna Marovic.

Source: novac.jutarnji.hr/novac/

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One of the reasons for the investment named by Jimi Macdonald, an investor in SoftBank, was the growing global need for electrification.

The funding will finance the building of a USD 200M campus for Rimac which will be located in Zagreb, Croatia. Additionally, Rimac will use this funding to invest in talent, development, production of batteries, and other such activities. The CEO of Rimac, Mate Rimac, stated that the investment will be vital for Rimac to stay independent of larger automakers: “It’s very good for us to have Porsche and Hyundai on board as shareholders, but we don’t want to be fully dependent on them.” At the present moment, the founder and CEO Mate Rimac is the only shareholder of Rimac Technology which recently became completely independent and in the ownership of Rimac Group. In November Bugatti and the Rimac hypercar division merged which resulted in the creation of the company Bugatti Rimac. Bugatti Rimac is currently in the development of the Rimac Nevera hypercar, valued at USD 2.5M. Rimac Nevera will be released this summer as a 1,914- horsepower EV and will allegedly accelerate from 0 – 60 mph in less than 2 seconds. Rimac is the majority shareholder of Bugatti Rimac, where Rimac Group holds 55% and 45% is owned by Porsche. Finally, Mate Rimac is the largest shareholder of Rimac Group. It is currently unknown what portion of the shares SoftBank and Goldman Sachs acquired in return for the investment.

Further on this topic, the president of the CVCA, Mirna Marović stated:

“The investment led by Softbank Vision Fund 2 and Goldman Sachs in series D rounds with the participation of existing investors, Porsche and InvestIndustrial, of EUR 500M per valuation of the Rimac group at two billion euros is extremely important for Croatia.

Softbank Vision Fund (SVF) 1 and 2 are the two largest venture capitals and the two largest technology investors in the world. SFV 1 with an estimated size of USD 100B began investing in 2017, and SVF 2 ‘worth’ USD 40B began investing in 2019. Goldman Sachs Asset Management is one of the most famous financial investors in the world. This transaction puts Rimac and Croatia on the radar of all large and significant investors, which puts Croatia from a small emerging market alongside the most developed markets in the world. Surely this transaction will also contribute to the increased interest of other global investors.

Croatia stands out as one of the leaders of the CEE region to a single extent – the number of unicorns per capita. In Croatia, there are as many as two unicorns, and technology companies financed by venture capital whose market value exceeds  USD 1B – Infobip and Rimac Automobili. In terms of the number of unicorns per capita, we are second only to Estonia, which historically has as many as seven.  In comparison, Italy has only one unicorn, confirmed last year, and the economy is immeasurably larger.

This transaction is also a confirmation that private equity and venture capital investments are aimed at promising Croatian companies to turn towards global trends and markets, concluding with the listing of current and future Croatian unicorns on the world stock exchanges. Private equity and venture capital investments are about to put in the economy that we as a society desire, a that as a society will lead us into the circle of the most developed countries.

The incredible news is how much the Croatian private equity and venture capital market has flourished despite the many black swans that surround us. Last year, according to official Invest Europe statistics, we attracted EUR 312M of private euros and venture capital investments, which represents an increase of 130% compared to the year before, and we have seen a similar growth rate since 2017. Unofficial figures give even more reason for optimism, with totals of private equity and venture capital investments exceeding EUR 650M.”

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Europe’s private equity and venture capital industry are more than just observers of political events: we are investors, partners to entrepreneurs, employers, and a continuous force for growth in markets and people. Security, predictability and accountability are the cornerstones of a vibrant private equity and venture capital market, framed by the laws and regulations in which the market operates, as part of global value-chains. From a narrow – and in these early days barely relevant – industry perspective, we are saddened to see a blooming economy, private equity and venture market in Ukraine wilt under the weight of war.

We stand behind the people of Ukraine. We stand together as an industry.

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The company envisages this expansion as a combination of organic growth and acquisitions and plans to make further investments to maintain the company’s leading position in B2B sales intelligence globally.

We are pleased to welcome Viking Global Investors as our new major investor. This funding will help us empower companies with international sales intelligence in the coming years, setting a new standard in data quality and compliance. This will accelerate our growth and global expansion as a leading provider of intelligent B2B sales data, said James Isilay, CEO of Cognism, through their website.

This investment follows Cognism ’2020 capital raising in which it raised $ 12 million and the 2021 one that ended with $ 12.5 million raised. Also, the company opened a US office in Boston in 2021, led by a new vice president of sales, Mark Bedard, who was previously at ZoomInfo and accepted industry veteran Phil Garlick on its board, UK Tech News reports.

No other software company offers a truly global sales intelligence platform like Cognism. By combining our contact information with advanced contextual data points such as technology and customer intention signals, we help modern revenue teams connect with trust and exceed goals. Our goal is to enable companies to build meaningful relationships with their next best client in an efficient and cost-effective way, Isilay said.

By the way, the company was founded in 2015 and is engaged in providing tools in sales teams to generate data on potential customers. Cognisma says their software is compliant with data regulations such as the GDPR, which was introduced in Europe in May 2018, and the company currently employs over 250 people based in seven countries including the UK, US, Canada, South Africa. Croatia, Macedonia, and Germany. Cognism is in the portfolio of the Croatian VC fund, South Central Ventures, which is a member of the Croatian Private Equity and Venture Capital Association (CVCA).

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This often means a balance between debt and equity. Such a crossroads is sometimes, for example, the initiation of investments in the development phase, when the entrepreneur (yet) would not dilute the ownership by allowing, for example, private equity investors, and for some reason cannot or does not want to rely entirely on banks or equity. Similar doubts can be imposed when, for example, in the entrepreneurial venture of two founders, one wants to leave and the other would like to continue their own. In such and many other business situations, something between a classic bank loan and equity is often the optimal solution – various variants of the so-called mezzanine financing, which is usually much more flexible than banking, including the issue of repayment or amortization of loans.

A new fund for the domestic market should soon be operational, which has recognized its market niche in this segment of SME financing, and whose investment potential should be close to HRK 400 million. Darko Drozdek, Krešimir Gjenero, and Tomislav Tadić are behind the Croatian Mezzanine Debt Fund project. Namely, at last week’s session of the Board of Directors, HANFA issued an approval for the establishment of the Croatian Mezzanine Debt Fund, a closed-ended alternative fund (ZAIF) for venture capital. This solution includes giving consent for the management of this fund to Mezzanine Partners. The fund plans to raise 50 million euros, and the duration of this fund’s investment is 4 to 7 years. Croatian Mezzanine Debt Fund is one of three venture capital fund projects that have passed the selection procedure of the European Investment Fund (EIF) and are financially supported by investments of the EIF and the Croatian Bank for Reconstruction and Development under CROGIP, an investment program these two institutions have agreed to encourage investment in small and medium-sized enterprises. Ultimately, the investment potential will be at least twice the amount of their support. According to Drozdek and Gjenero, the goal is ultimately to raise a total of 50m euros. After HANFA received approval for the establishment and management, talks with (other) potential investors, namely financial and institutional investors, will follow in the next few weeks.

All in all, the fund should start operating in a few weeks. Given the specific profile, and one of the features of the mezzanine arrangement is that investments start as debt, and the cycles in terms of transaction realization are somewhat different than, for example, private equity (PE) funds. Therefore, it is calculated that the first CMD fund transactions could follow as early as the end of the first quarter. “The mezzanine concept usually comes as a step before private equity capital,” Gjenero points out. Regarding the size of individual transactions, they point out that the target amounts are between one and five million euros. When it comes to required/expected returns, they are positioned in accordance with the hybrid character of the mezzanine “product” and the accompanying risks. Domestic financiers will say that the mezzanine is very well recognized today as a niche with good potential, although there are few institutional players, funds, in it so far. On the one hand, banks have tightened lending conditions, and on the other, the PE industry, they say, is already very crowded. HANFA points out that the plan is for the fund to invest in at least 10 to 15 companies via subordinated debt, not excluding warrants with an equity component.

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The financing arranger is the second-largest American, and the third-largest investment bank in the world, Bank of America. The process of investing fresh capital for the further development and growth of Bellabeat began in April and should be completed by the end of January this year.

Bank of America is an investment bank that finds promising companies for its clients to invest in, so Bank of America is a mediator, financing arranger, gathers investors, and leads the investment, and we get investors from America and Europe to whom we sell ownership stakes. Bellabeat is financed by selling equity stakes, thus increasing our market value. The fresh capital thus obtained is invested in development and growth, after which we achieve greater market valuation. So far, we have raised a total of $ 100 million in capital investment from 28 investors. He would also emphasize that the investment of Bank of America closes the biggest round of recapitalization so far – says Sandro Moore.

We are enthusiastic about working with Bellabeat, with whom we share the same goals and values. The team of high-ranking Bank of America experts is dedicated to Bellabeat as the company has high-value technology and experience in the field of health and wellness, thanks to which Bellabeat achieves superior market valuation. The business profile and prominent position in the sector make investing in Bellabeat attractive to a wide range of Bank of America clients, in a wide range of investment strategies and geographical areas, said Stephen Bloom, CEO of Bank of America Merrill Lynch.

New capital raised before the IPO (pre-IPO) Bellabeat will invest in the development of new versions of its core technologies, obtaining permits for their use in health care facilities, opening a chain of new stores, one of which in Zagreb, in the development of corporate wellness programs, acquisition of companies with which to expand and complete its range, construction of its own wellness campus and other projects.

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Already in 2020, these startups had revenues of up to 10 million euros, growing up to 10 times a year and continuously increasing the number of employees. Now there are close to 300 employees.

The list is not numbered, and the 25 most promising startups are listed in alphabetical order. These are: AGRIVI, Aircash, airt, Amodo, AMPnet, Ascalia, BiteMe Nutrition, Cidrani, CircuitMess, Farseer, Go Green Ozonator, Identyum, Include, Memgraph, Mindsmiths, Miret, NUOTWO, OmoLab, OptimoRouek, Orqa. ai, sportreact, STEMI and Wasp.

For each startup, the founders are listed, the year of establishment, how many total investments it has received so far, how much income the startup generated in 2020, as well as the growth compared to the year before, and the number of employees. If the startup is newly established, then n / a is specified, ie there is no data. The number of employees is stated for 2020, and the legal headquarters is stated first at the headquarters, and then, if the startup has its headquarters abroad and development headquarters in Croatia.

Mirna Marović, president of CVCA, participated as an expert jury member in the selection of TOP25 startups that are worth following in 2022.

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Peerless Network is a global provider of VoIP (Voice over IP) services from Chicago and Infobip expects to take over the company next year once the regulatory procedure and approvals are issued. This is Infobip’s fourth acquisition on the US market in less than a year.

With this takeover Infobip has ensured a significant presence in the VoIP segment via the Internet on the US market and clients have access to a wide range of CPaaS products, Infobip said. Peerless Network was founded in 2008 with its own ‘voice’ network. It covers 93% of the US population and has more than 4,500 interconnections in 49 American states and a turnover of 9 billion minutes a month on more than 200 markets. The latest takeover by Infobip follows it acquired the US OpenMarket company for approximately $300 million. In addition, in the first quarter of this year, Infobip generated an increase in revenue of 55% year on year.

Earlier this year Infobip also acquired the Croatian Shift franchise and the leading provider of text messaging firewall services, Anam Technologies in Ireland. Infobip revealed that last month it ensured a loan of $500 million, for which its financial adviser was Morgan Stanley. The main investors were credit funds managed by Ares Management Corporation and BlackRock. The new financing places Infobip among an exclusive group of reputable IT companies with high growth and big value that used similar financing models. This is Infobip’s second round of external financing after significant strategic investments by One Equity Partners (OEP) of €300 million in the second half of last year, Infobip said.

The latest takeover has accelerated its international strategy by several years and the companies’ complementary solutions will process more than 30 billion monthly user interactions through communication channels in more than 190 countries. That will enable even stronger growth in doing business in the USA, Chief Executive Director, and part-owner of Infobip, Silvio Kutić, said.

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