Investments in Western Balkans have been very miscellaneous last year. All kinds of VCs led and followed rounds in Croatian and Serbian startups, which dominated over neighbouring Bosnia and Hercegovina, Montenegro, Kosovo, Albania and North Macedonia (+ Slovenia**). Undoubtedly, the number of investors interested in Western Balkans is growing. Today, from local VCs to those from CEE region and Central Europe, the area sees a good variety of UK and USA VCs, with a good sprinkle of Asian capital.

10 and more years ago this was only wishful thinking. Heck, startups from Serbia and Croatia could only dream of local funds back then, while for some parts of Western Balkans this is the case even nowadays). So, these founders turned elsewhere, where they wouldn’t spend a fortune just to meet the investors. The closest options they had were the rest of the CEE countries.

This little throwback makes us wonder what the current situation is. Are Western Balkans still a promising market for CEE venture capital funds? Or do they mainly focus on their local startups and then hop over to Western Europe rather than Western Balkans?

Over this and adjacent topics, we talked with three VCs from the CEE region investing in Western Balkans: Polish Inovo VC (invested in Splx.ai, Pythagora, Index Health), Bulgarian LauncHUB (GlycanAge) and Romanian Underline Ventures (Collabwriting, Trickest, Turneo). Besides them, its worth mentioning there was a good amount of investments for Western Balkans startups from CEE funds like ZAKA VC (SpectreXR, Spiritus, Flexkeeping), Credo Ventures (Trustpath, Collabwriting, Trickest) and Eleven Ventures (Native Teams, Smart Octo).

**For the purpose of this article we add Slovenia into the Western Balkans mix. Croatia added as well, although we are aware some geo-administrative classifications wouldn’t label it as such.

Croatia moves fastest in startup development, with Slovenia and Serbia following

First things first. Croatia and Serbia have been making waves in the startup world recently, while their neighbors are mostly watching from the sidelines. These two nations dominate the Western Balkans’ ecosystem, but treating them as a single unit doesn’t do justice to the differences in their trajectories, Underline’s Bogdan Iordache remarks.

“We should treat Serbian and Croatian startup ecosystems separately, not because of the size of their ecosystems, but also because of their different socio-political climates.” He points how Infobip and Rimac Automobili pushed Croatia to 11th place globally in terms of unicorns per GDP. Also, since joining the EU nearly ten years ago, Croatia’s infrastructure, funding access, and overall ecosystem has flourished. Stefan Krstevski from Inovo emphasizes how Croatia’s startup value shot up 7.4x since 2019, its unicorn conversion rate is 7.1% (doubling the CEE average), and it raised over €92Min VC funding in 2023—30% more than the year before. No fluff there. Croatia is polished and delivering.

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