SOUTH-EAST EUROPE STARTUP REPORT 2017 | page 1 SOUTHEAST EUROPE STARTUP REPORT 2017 2017 Copyright ©ABC Accelerator SOUTH-EAST EUROPE STARTUP REPORT 2017 | page 2 EXECUTIVE SUMMARY The startup ecosystem in Southeast Europe (SEE) is alive and well. In all eight countries of the region, there are startups, supporting institutions, interesting technology, and founders with an ambitious mindset believing that even in this part of Europe, globally successful companies can be created. In 2017, there was evidence that this is indeed the case. Outfit7, a family-entertainment company with Slovenian founders and pioneer in the field of digital entertainment, has been sold for 1 billion USD to a Chinese investor in January, thus becoming the first unicorn in the region. It might not be the last – companies like Celtra (SLO), Rimac (CRO), NSoft (Bih) and Nordeus (SRB) are increasing their valua- tions fast, joining partnerships with high-profile corporations, and planning for potential IPO’s. These companies also act as focal points in their local communities/ecosystems. Inspired by Norde- us’s success, a nascent mobile gaming industry has started to develop in Belgrade, Serbia. Similarly, NSoft is supporting the development of the local startup ecosystem in BiH. Zemanta, pioneers in dig- ital marketing, has arguably spurred the development of the whole startup community in Ljubljana, Slovenia, after its establishment a decade ago. In addition to providing direct support, these compa- nies have motivated and inspired an entire generation of entrepreneurs, and promoted startups as a potential career choice to young professionals with global ambitions. These startup pioneers are still guiding the way forward. Zemanta has been acquired by the global leader in its industry, Outbrain from Israel. Additionally, Rimac has raised money from its most important partner, the global leader in electric battery supplies from China, which is also its potential exit partner. Frame (SRB) has raised a 16 million USD round from Bain capital and Microsoft. Partnering with the global leaders is their strategy to succeed – and to exit. Successful exits seem to be the next step in the development of the local ecosystem and its leading companies. These will help spawning the next generation of the regional startups. When suc- cessful, an exit can bring new strategic partners, significant amounts of new money, forming the basis for the next round of investments, and experienced founders that want to repeat their success story. The next generation of startups in the region will be more experienced, better funded, and faster. They will aim for global success from their inception. A series of successful Initial Coin Offerings (ICO) by this new generation of Slovenian startups has raised more funding in 2017 than the total com- bined value of public financial support in the whole region – in the last decade. These startups are now among the global tech leaders and have turned Slovenia into hub for blockchain technologies, and example for ICO startups in the SEE region. Other industries are sometimes less well known, but no less funded or ambitious. Seven Bridges (SRB) is a three-time Bio-IT World Best of Show winner that has raised 50 million USD to transform biomedical data companies, and Genialis (SLO) follows in similar footsteps. While the regional startups’ ambition and potential are not in doubt, they could use more support. Regional governments are often unable to support these financially or simply lack knowledge about how to do it best. Moreover, the lack of equity (the ‘equity gap’) for seed- and early-stage financing is especially detrimental for the development of regional startups and impacts their survival rate. Additionally, the lack of national cooperation is worsened with significant obstacles to travel, especially in terms of visa requirements. Most importantly, however, The founders of the first potential founders in the region need to believe that they can create SEE unicorn come from Slovenia globally successful companies – and convince others to follow them on their path. Recent successes are the best growth drivers the SEE region could hope for. 2017 Copyright ©ABC Accelerator SOUTH-EAST EUROPE STARTUP REPORT 2017 | page 3 CONTENTS 1. Foreword 5 7.8 Albania 65 2. About Eit Digital 6 7.8.1 Framework conditions 65 3. About ABC Accelerator 6 7.8.2 Startup and venture ecosystem 4. Objective of the report 7 overview – stakeholder’s description 5. Methodology 7 and their connections 66 6. Main insights 8 7.8.3 Ecosystem stakeholders group 67 6.1 State of the startup ecosystem in SEE 8 7.8.4 Ecosystem performanceand the role 7. Country reports 10 of the government and its 7.1 Slovenia 10 policy measures 72 7.1.1 Framework conditions 10 8. Top startups in the region 74 7.1.2 Startup and venture ecosystem 8.1 Gjirafa 74 overview 11 8.1.1 Company description 74 7.1.3 Stakeholders description incubators, 8.1.2 Business model 74 accelerators, early programs 12 8.1.3 Total capital raised 74 7.2 Croatia 21 8.1.4 Contact information 74 7.2.1 Framework conditions 21 8.2 Baboon 75 7.2.2 Startup and venture ecosystem 8.2.1 Company description 75 overview 24 8.2.2 Business model 75 7.3 Serbia 32 8.2.3 Total capital raised 75 7.3.1 Framework conditions 32 8.2.4 Contact information 75 7.3.2 Startup and venture ecosystem overview – 8.3 Softmogul 76 stakeholder’s description and their 8.3.1 Company description 76 connections 33 8.3.2 Business model 76 7.3.3 Ecosystem performance 36 8.3.3 Total capital raised 76 7.4 Bosnia and Herzegovina 39 8.3.4 Contact information 76 7.4.1 Framework conditions 39 8.4 Nettrade 77 7.4.2 Startup and venture ecosystem 8.4.1 Company description 77 overview – stakeholder’s description 40 8.4.2 Business model 77 7.4.3 Ecosystem performance 46 8.4.3 Total capital raised 77 7.4.4 Role of government and its policy 8.4.4 Contact information 77 measures 49 8.5 Creatic 78 7.5 Kosovo 51 8.5.1 Company description 78 7.5.1 Framework conditions 51 8.5.2 Contact information 78 7.5.2 Startup and venture ecosystem overview – 8.6 Nordeus 79 stakeholder’s description and their 8.6.1 Company description 79 connections 51 8.6.2 Business model 79 7.5.3 Ecosystem performance 52 8.6.3 Total revenue created 79 7.5.4 Role of government and its policy 8.6.4 Total capital raised 79 measures 53 8.6.5 Contact information 79 7.6 Montenegro 54 8.7 Seven bridges 80 7.6.1 Framework conditions 54 8.7.1 Company description 80 7.6.2 Startup and venture ecosystem 8.7.2 Business model 80 overview – stakeholder’s description 8.7.3 Total revenue created 80 and their connections 54 8.7.4 Total capital raised 80 7.6.3 Ecosystem performance 55 8.7.5 Contact information 80 7.6.4 Role of government and its policy 8.8 Frame 81 measures 56 8.8.1 Company description 81 7.7 The Former Yugoslav Republic 8.8.2 Business model 81 of Macedonia 57 8.8.3 Total capital raised 81 7.7.1 Framework conditions 57 8.8.4 Contact information 81 7.7.2 Structural difficulties 59 8.9 Koola 82 7.7.3 Startup and venture ecosystem 8.9.1 Company description 82 overview 59 8.9.2 Business model 82 7.7.4 Stakeholders description 60 8.9.3 Total capital raised 82 7.7.5 Associations 60 8.9.4 Contact information 82 7.7.6 Co-working spaces and incubators 60 8.10 Fress 83 7.7.7 Investors 61 8.10.1 Company description 83 7.7.8 Universities 62 8.10.2 Business model 83 7.7.9 Ecosystem performance 63 8.10.3 Total capital raised 83 7.7.10 Role of government and its policy 8.10.4 Total revenue created 83 measures 64 8.10.5 Contact information 83 2017 Copyright ©ABC Accelerator SOUTH-EAST EUROPE STARTUP REPORT 2017 | page 4 8.11 Vidiovo 84 8.23 Rimac 96 8.11.1 Company description 84 8.23.1 Company description 96 8.11.2 Business model 84 8.23.2 Business model 96 8.11.3 Total capital raised 84 8.23.3 Total revenue created 96 8.11.4 Contact information 84 8.23.4 Total capital raised 96 8.12 Bizbook.Ba 85 8.23.5 Contact information 96 8.12.1 Company description 85 8.24 Infobip 97 8.12.2 Business model 85 8.24.1 Company description 97 8.12.3 Total capital raised 85 8.24.2 Business model 97 8.12.4 Contact information 85 8.24.3 Total revenue created 97 8.13 Goody 86 8.24.4 Total capital raised 97 8.13.1 Company description 86 8.24.5 Contact information 97 8.13.2 Business model 86 8.25 Ivote 98 8.13.3 Total capital raised 86 8.25.1 Company description 98 8.13.4 Contact information 86 8.25.2 Business model 98 8.14 Nsoft 87 8.25.3 Total capital raised 98 8.14.1 Company description 87 8.25.4 Contact information 98 8.14.2 Business model 87 8.26 Grouper 99 8.14.3 Total capital raised 87 8.26.1 Company description 99 8.14.4 Contact information 87 8.26.2 Business model 99 8.15 Viberate 88 8.26.3 Total capital raised 99 8.15.1 Company description 88 8.26.4 Contact information 99 8.15.2 Business model 88 8.27 Cognism 100 8.15.3 Total capital raised 88 8.27.1 Company description 100 8.15.4 Contact information 88 8.27.2 Business model 100 8.16 Outfit7 89 8.27.3 Total capital raised 100 8.16.1 Company description 89 8.27.4 Contact information 100 8.16.2 Business model 89 8.28 Inplayer 101 8.16.3 Total revenue created 89 8.28.1 Company description 101 8.16.4 Total capital raised 89 8.28.2 Business model 101 8.16.5 Contact information 89 8.28.3 Total capital raised 101 8.17 Iconomi 90 8.28.4 Contact information 101 8.17.1 Company description 90 8.29 Dentem 102 8.17.2 Business model 90 8.29.1 Company description 102 8.17.3 Total capital raised 90 8.29.2 Business model 102 8.17.4 Contact information 90 8.29.3 Total capital raised 102 8.18 Eurosender 91 8.29.4 Contact information 102 8.18.1 Company description 91 9.