“The Croatian Private Equity and Venture Capital Association has existed for 20 years, and back then, and for many years after, it was just a brave group of ‘risk capital’ investors, where most entrepreneurs did not recognise them as partners for development, growth, and success. Today, private equity and venture capital funds, also known as risk capital funds, are no longer something exotic or a market niche. On the contrary, they are funds that, by supporting the most dynamic companies in our economy, have become the cornerstone of the Croatian economy and an integral part of Croatian society. Private equity and venture capital funds support our everyday lives to an extent we do not fully realise. Today, these companies are present in all leading firms in various sectors, from IT to retail, healthcare, tourism, manufacturing, and many others. The initial investment is often in startups or small and medium enterprises, and these small firms become international success stories because private equity and venture capital investors seek investment opportunities with the potential for rapid growth and globally competitive products or services. Ambitious local companies with a few employees and a bright idea can become multinational corporations employing thousands. The contribution of private equity and venture capital to the Croatian economy and society as a whole is a story of support for innovation, growth, and job creation. Today, we are at the forefront of transforming the Croatian economy in the desired direction of ‘high skill, high tech, and high wage.’ This is exactly in line with the slogan of our BestInvest conference – support the best and transform the rest!” said Mirna Marovic, President of CVCA.

“The Croatian Bank for Reconstruction and Development (HBOR) is crucial for developing the venture capital and growth capital market and has been the central point of development for this industry for over a decade. In the last five years, HBOR has launched a series of new initiatives, including CROGIP and CEETT, in partnership with the European Investment Fund (EIF), into which 50 million euros have been invested so far, with this amount increased by private investors’ capital to 300 million euros, representing available capital for fast-growing and innovative Croatian companies. New initiatives include CROGIP 2 and the Three Seas Initiative, and new financial instruments are being developed that HBOR will be able to create after a rigorous approval process by the European Commission from the InvestEU program,” highlighted Hrvoje Cuvalo, President of the Management Board of HBOR, at BestInvest.

Sladana Cosic, Head of Office in Croatia, European Investment Bank (EIB) Group, stated from the conference stage that the EIB, together with its sister company the EIF, is crucial for the development of the private equity and venture capital industry in Croatia, participating in the CROGIP, CROGIP II, CVCi, CVCi II, CEETT initiatives together with partners HBOR and the Ministry of Regional Development and European Funds.

The event, which brings together investors worth over three billion euros and the most innovative Croatian entrepreneurs, was held for the fourth consecutive year. The expert jury consisted of prominent experts from the business community: Velimir Srica (Faculty of Economics), Marijana Ivanov (Faculty of Economics/Croatian Exporters), Leo Mrsic (Algebra), Ivana Gazic (ZSE), Goran Saravnja (HGK), Tamara Perko (HUB), Hajdi Cenan (CRO StartUP), Sven Harjacek (Bird Incubator), Filip Stipancic (Smion), Vladimir Nisevic (Poslovni dnevnik), Andrej Knez (Addiko Bank), Bernard Ivezic (Unicorn Underground).

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In the category the Founder of the Year 2022, the award was won by Nikolina Lauc, co-founder and CEO of GlycanAge, and Investor of the Year 2022 is Provectus Capital Partners. The award for Private equity investment of the Year 2022 was also given to Provectus Capital Partners for the investment in Arithera Special Hospital. The Later-stage Venture Capital Investment of the Year 2022 went to Rimac Group. The Early-stage Venture Capital Investment of the Year 2022 was awarded to Fil Rouge Capital for their investment in Native Teams, and the Fundraising of the Year 2022 went to Provectus Capital Partners.

“When private equity and venture capital investments are viewed in the context of a share of total GDP, Croatia attracted 0.650% of its GDP in private equity and venture capital investments in the last year. Croatia is the only Central and Eastern European (CEE) country besides Estonia whose 2022 private equity and venture capital investments as % of GDP exceeded the European average of 0.638%. All other CEE countries are far below that average, as the CEE average for attracting private equity and venture capital investment is 0.131% of GDP for 2022. Croatia is, therefore, five times better than the regional average (CEE) and slightly better than the European average, which is rare in other economic indicators.” – said Mirna Marovic, President of CVCA.

“Croatia, on the wings of the success of Infobip, Rimac, Photomath, Fonoa and many other successful scaleup and unicorn business stories, supported by private equity and venture capital investments, has the opportunity to transform its economy. This positive transformation – embodied in the BestInvest.hr slogan: “Support the Best & Transform the Rest” is based on three pillars: high tech, high skills, and high wage! For a small country like us, it is the only way to achieve long-term and sustainable growth.” – said Mirna Marovic, President of CVCA.

At this year’s BestInvest, we also had the opportunity to welcome the State Secretary Zrinka Raguž from the Ministry of Regional Development and EU Funds, who officially opened the BestInvest conference on behalf of Minister Erlic.

The main keynote presentation was given by Hrvoje Cuvalo, President of the Management Board, Croatian Bank for Reconstruction and Development (HBOR), in which he emphasised the crucial role of HBOR in contributing to the development of the private equity and venture capital markets.

“HBOR has profiled itself as the central institution for developing Croatia’s equity and quasi-equity market. For the creation of new venture capital funds and their investment in the initiation, growth and development of Croatian companies, along with HBOR and EIF, the presence of other institutional investors is necessary, as well as private investors, because only with them in synergy can we achieve significant growth.“- said Hrvoje Cuvalo, President of the Management Board of the Croatian Bank for Reconstruction and Development (HBOR), at BestInvest.

Victoria Zinchuk, Regional Director of the European Bank for Reconstruction and Development (EBRD) presented regional support to private equity and venture capital ecosystems provided by the EBRD.

Other speakers with the keynote presentations were Nikolina Lauc (GlycanAge), who gave a presentation on the topic “Can we stop or even restore biological ageing in order to live a longer and healthier life?”, Dubravko Babic (Eridan Communications Inc.) talked about technology startups in Silicon Valley, Dominik Dolenec (Emona Capital), presented his London-based views on global scaling up opportunities for CEE companies, and Ivo Bozic (Raiffeisen Bank International AG), who discussed opportunities for the venture debt and other debt financings for startups/scaleups.

The panel of private equity investors was attended by investors who collectively manage over 4 billion euros, namely Marko Galic (Provectus Capital Partners), Krešimir Gjenero (Mezzanine Partners), Tomislav Tomljenovic (Enterprise Investors), Aleksandar Dragicevic (Mid Europa) and Mateo Zokalj (BlackPeak Capital), and the panel was moderated by Vladimir Nisevic (Poslovni dnevnik).

Miryana Joksovic (Arcion Labs), Matija Nakic (Farseer), Edo Mujkic (BiteMe Nutrition) and Marin Bek (Ascalia) participated in the Founder’s panel, and the panel was moderated by Bernard Ivezic (Jutarnji List).

Two Fireside Chats were also held, where Goran Deak (TDA), Julien Coustaury (Fil Rouge Capital) and Pierre Matek (Feelsgood Capital), and moderator Mirna Marovic (CVCA), discussed the path from local funding to the global influence of TDA. The second Fireside Chat was on the topic of the global success of the Museum of Illusions, where Teo Sirola, president of the Museum of Illusions, shared his thoughts in a conversation with Mirna Marovic (CVCA).

The expert jury for the selection and awarding of BestInvest awards consisted of eminent experts from the business community who presented the awards to this year’s laureates (in alphabetical order): Hajdi Cenan (CRO StartUP), Ivana Gazic (ZSE), Marijana Ivanov (Faculty of Economics/Croatian Exporters), Bernard Ivezić (Jutarnji list), Andrej Knez (Bloomberg Adria), Zeljko Krizmanic (Bird Incubator), Leo Mršić (Algebra), Vladimir Nisevic (Poslovni dnevnik), Tamara Perko (HUB), Morena Plejic (Progress Market ZSE), Miodrag Sajatovic (Lider), Goran Saravnja (HGK), Hrvoje Serdarusic, Velimir Srica (Faculty of Economics) and Filip Stipancic (Lean Startup Croatia).

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On Wednesday, 17 May, and Thursday, 18 May, Dubrovnik hosted the investment elite of private equity and venture capital fund managers (GPs) worth more than four billion euros, the value of two recently built Peljeseac bridges. In addition, their end-investors (LPs), whose amount of capital under management exceeds the Croatian GDP many times over, were also at the conference. The organisers of the LP-GP Networking Event, the Croatian Private Equity and Venture Capital Association (CVCA), point out that the investment elite had the opportunity to get exclusive insight into the potential of Croatia and the region in creating unicorns, successful scaling of startups and the opportunities that venture capital provides for successful Croatian entrepreneurs.

“Croatia has already positioned itself highly in terms of attracting private equity and venture capital in the region, thanks to numerous success stories such as one Rimac and Infobip, but also CVCA members, fund managers who manage more than 3.2 billion euros of capital. Few people know that private equity and venture capital investments in Croatia have become a significant driving force in the economy and that such investments have exceeded 2.5 billion euros in the past two years. Croatia is one of the fastest growing markets in Central and Eastern Europe (CEE) in terms of growth rate, and we are catching up with more developed CEE markets such as Estonia and Poland.” – said Mirna Marovic, President of CVCA. “Examples of venture capital and private equity investments are not only in the Croatian unicorns Rimac and Infobip, and high-tech companies. We find examples of private equity investments at every step, for example, going to a bakery (Mlinar or Pan-Pek), a store (Studenac) or a private health facility – mostly, these are companies that have received such investments“, said Mirna Marovic.

Victoria Zinchuk, Regional Director, EBRD, had a keynote presentation on the important role of the EBRD in building the resilient private equity industry in the CEE/SEE region. With EBRD’s rigorous due diligence and vetting process, EBRD acts as one of the anchor investors for the fund managers and mobilises capital from other investors. EBRD has current total exposure to private equity funds exceeding 3 billion euros, with historical commitments approaching 6 billion euros with more than 2,100 underlying portfolio companies supported to date. Besides traditionally supporting private equity funds, EBRD recently enhanced its support to early-stage innovation, including venture capital investments directly, supporting fund managers and through the star venture programme.

Gelsomina Vigliotti, Vice-president, EIB, and Chair of the Board of Directors, EIF, presented the crucial role of the EIF in supporting the European private equity and venture capital industry with more than 30 billion euros in private equity and venture capital commitments. However, the CEE/SEE region is still underdeveloped compared to the EU average, with the main challenge for the CEE/SEE fund managers remaining fundraising. and in particular, reaching the first closing. EIF has a crucial role as an anchor investor providing the ‘seal-of-approval’ for other investors to invest in the CEE/SEE private equity funds, and EIF has provided lots of support through various dedicated programmes over the last 12 years. To draw in foreign investors, it would be beneficial to showcase market potential through flagship transactions, both investments and exits, to gain attention from market participants, and to have a signalling effect driven by local investors, such as pension funds, actively supporting players within their domestic markets.

Ivan Osmak, CEO of Quantive (formerly Gtmhub), a soonicorn from the SEE region, presented a powerful demonstration of their journey to efficient growth at the LP-GP Networking Event. Osmak revealed that by adopting an AI-driven approach and challenging the status quo of B2B SaaS companies, Quantive achieved a staggering 67% YoY revenue growth, while concurrently reducing operational expenses by 56%. The company completely overhauled its operations, examining every function for incremental improvements and building an efficient business model that led to significant productivity gains in customer support, sales, marketing, and operations. Leveraging acquired AI expertise, they launched a suite of tools, including ‘Ask Quantive’ for internal support, ‘Quantive Cold’ for marketing, a ‘Transcript Summarizer’ for sales, and ‘Quantive Athena’ for operations. Osmak emphasised the crucial role of AI in businesses’ survival and growth, asserting that the ability to achieve more with less is not just possible, but a continuous requirement for modern business operations.

Dominic Maier from AXA Venture Partners, a 1.2 billion dollar venture capital firm, acting mostly as a fund-of-funds (or an LPs) with some direct investments, presented what it takes to make a VC fund successful in the eyes of LPs. His firm focuses on finding VC fund managers who can deliver 3x returns which is hard. However, the VC industry shows statistical and scientific evidence of the persistence of returns in the fund managers that achieve consecutive top-quartile return performance in follow-on funds. Despite the current market valuation turmoil, some of the greatest opportunities are created post-market downturns. An example includes Spotify, created in 2006 before the global financial crisis. The venture capital market valuation correction may not be over, but there is a clear upside.

Dariusz Pietrzak from Enterprise Investors, the oldest and one of the largest private equity firms in the CEE, presented the recent trends and untapped opportunities in the region. Enterprises Investors focuses on two major investment themes: consumption-driven and export-driven companies. The CEE private equity markets represent the growth opportunity to close the gap of lagging behind Western European counterparts. However, attracting LPs remains challenging in the current market environment due to the denominator effect (other asset classes valuations falling), recent rapid capital deployment/change in valuations, and avoidance of geopolitical risks more present in the CEE.

During the LP-GP Networking Event’s Fireside Chat, Nenad Marovac, Founder and Managing Partner of DN Capital, engaged in a conversation moderated by Mirna Marovic. With more than 25 years of venture capital and private equity investment experience, Marovac shared his journey into venture capital, his founding of DN Capital, and his leadership that has contributed to the creation of ten unicorn companies. Marovac explained the traits he looks for in potential unicorn investments, emphasising market size, team strength, unique and defendable products, traction, and price. Using the example of Shazam, he highlighted his active participation in building unicorns. Marovac also shared his views on the CEE/SEE region’s potential for venture capital ecosystem development and unicorn creation, recommending international orientation from the start for companies in smaller markets. He addressed the importance of LPs as the lifeblood of the industry and the necessity for continuous engagement and communication with them. Discussing his secret sauce for persistently delivering returns for end-investors, Marovac emphasised the importance of discipline, diversification, and backing winning companies. As a highly respected figure in the venture capital industry, Marovac gave his insights into the evolution of the sector, anticipating a period of consolidation and challenging times ahead due to falling tech stocks, downrounds, geopolitical conflict, energy crisis, and rising inflation. Despite these challenges, Marovac remained optimistic about finding excellent investment opportunities and emphasized the importance of launching DN Capital’s sixth fund to seize these opportunities.

A dynamic VC panel discussion took place with Valeri Petrov of Eleven Ventures, Julien Coustaury from Fil Rouge Capital, Domagoj Oreb of Feelsgood Capital, and Silvije Radisic from Aymo Ventures, moderated by Mirna Marovic, President of CVCA. The panellists explored the unique challenges and opportunities within the CEE/SEE region venture capital ecosystem, debating whether the current landscape, with more realistic valuations and less available capital, presents an optimal time for investment. They shared insights on identifying promising startups, emphasising the potential for creating unicorns within the CEE/SEE region. With exponential growth of local venture capital investment in the early stage startups, the CEE/SEE region now represents an attractive opportunity for further scalling of local startups.

An insightful PE panel discussion was conducted by distinguished panellists: Ivan Kurtovic from InterCapital Asset Management, Igor Cicak of Provectus Capital Partners, Marko Hinic at Integral Venture Partners, Janez Skrubej from Invera Private Equity Partners, and Ivana Hatvalic Poljak of Prosperus Invest, moderated by Mirna Marovic, President of CVCA. They analysed the potential of value creation strategies, including long-term views ranging from buy-and-build approaches, cost-cutting, and commercial excellence, to financial structure optimisation. The panellists examined how these strategies have shifted in light of current market conditions. In discussing how the CEE/SEE region might close the private equity investment activity gap with Western Europe, they acknowledged challenges related to market size, fragmentation, legal/regulatory uncertainties, and attracting end investors. The challenges and potential solutions for attracting LPs from outside the CEE/SEE region to local growth capital and private equity funds were also discussed, along with the impact of the green transition on investment strategies. They contemplated the opportunities and challenges linked to a shift towards sustainable investments, and the potential of ESG/sustainability integration as a value creation source at the fund and portfolio company levels.

An engaging panel discussion with the Limited Partners (LPs’) views on the Central and Southeast Europe (CEE/SEE) region and outlook included Victoria Zinchuk from the EBRD, Marco Natoli of the EIF, Gordan Kuvek representing HBOR, Dominic Maier of AXA Venture Partners, and Gordana Neralic from Erste Ltd., with moderation provided by Mirna Marovic, President of CVCA. The panellists delved into the role of public investors, international financing institutions, and national development promotional banks in venture and growth capital investments, emphasising the Croatian context. They further explored criteria for investment decisions in the CEE/SEE region, providing insights into successful fundraising. Market volatility and its effect on LP allocations, illiquidity risk, and LP-GP dynamics in fundraising were major points of discussion. Emphasising the current shift towards green transition, the panellists evaluated the impact of ESG and sustainability considerations on investment strategies, arguing for their potential as sources of value creation. They also explored the role of LPs and General Partners (GPs) in promoting diversity, equity, and inclusion within the venture capital and private equity ecosystem.

The LP-GP Networking Event concludes with the dynamic LPs-GPs ‘speed-dating’ one-to-one round-table discussions, fostering direct dialogue between end-investors or Limited Partners (LPs) and PE/VC fund managers or General Partners (GPs) to uncover promising investment opportunities in the CEE/SEE private equity and venture capital markets. The side events offered additional opportunities for networking between LPs and GPs.

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