The Startup Ecosystem of Croatia

Croatia boasts one of the most promising startup scenes in the Balkans. The center of startup activity in Croatia, the capital of Zagreb, is developing into a regional startup hub. There is a strong support network in the city with many startup events and conferences, and the country’s EU membership facilitates expansion into other European markets. In recent years, Croatia has shown remarkable potential after joining the unicorn club with Infobip and Rimac.
Some of the main challenges that the Croatian startup ecosystem faces are related to risk aversion mindsets, unfriendly business regulations, and difficulty accessing funding for startups to scale. At times, it seems Croatia follows a problematic approach common in the EU: encouraging entrepreneurship with grants instead of allowing private sector stakeholders and investors to lead the way. While such grants help, they also create a closed system rather than opening to the EU and global market. Other concerns about Government involvement relate to R&D support programs favoring large companies, while links between universities and industry are limited.
Croatia joined dozens of countries offering Digital Nomad Visa to attract foreign talent, allowing non-EU nationals to live in the country long-term. As for local talent, Croatia has a skilled talent pool, but there has been an increasing trend of young people leaving the country or registering their companies outside of Croatia. Sadly, most young Croatian IT companies choose outsourcing work over building their own brand. This is another effect of the lack of early stage investors, particularly pre-seed and seed-stage VCs, which would allow Croatian startups to grow and scale.
Reducing administrative burden is another potential area of improvement. Croatia requires reforms of tax and regulatory mechanisms to remove various barriers and pitfalls for young companies and startups. CRO STARTUP is a national startup association that works to overcome such core challenges in the startup ecosystem. The country has made near term progress by cutting red tape, yet there is still work to be done in digitizing business processes. As a positive development in this area, the National Development Strategy 2030 aims to enhance the digital transformation of the economy and society as the first priority.
There are some prominent accelerators and incubators in Croatia, such as ZICER, Startup incubator Rijeka, the Bird incubator (founded in early 2021 with the aim of helping startups with software ideas related to data analytics, artificial intelligence, and machine learning), Poduzetnički inkubator BIOS, and the Science and Technology Park Step Ri.
Infobip, Croatia’s inspiring success story, is also actively developing the local startup ecosystem with the Infobip Startup Tribe, launched in 2021. This new global startup program seeks out innovative and impactful startups and assists them with growth tools, credit allowances, and network support.
On top of all the above, there are many startup events and conferences in Croatia, and numbers are increasing annually. Startups can find support, funding, and exposure with events such as Zagreb Connect, Idea Knockout, Shift, Get in the Ring Split, and GROWit.
With success stories such as Infobip and Rimac, we are confident that the Croatian startup ecosystems will continue their growth in the years to come.