Croatia has a chance to become a fintech hub within the EU. Here are the most significant representatives of the scene

Although there are still not many fintech products in Croatia, there is certainly potential. This was confirmed by Nikola Škorić, the CEO and founder of the domestic company Electrocoin, which deals with cryptocurrency trading mediation and processing crypto payments.

‒ A positive atmosphere for fintech in Croatia definitely exists and has so far successfully encouraged and supported its development, but today we must certainly take into account the global economic slowdown due to the recession, and thus the slowdown of fintech. Nevertheless, that industry is far from stopping ‒ said Škorić, adding that there are very good relations between domestic fintech companies and the relevant regulatory bodies in Croatia.

‒ The advisor in the Governor’s Office and fintech coordinator of the Croatian National Bank, Linardo Martinčević, emphasized at the panel ‘Regulating FinTechs in Croatia’ at the recent Money Motion conference that Croatian fintech companies have ‘all doors open’ unlike many other countries ‒ he explained, adding that although there may be a lack of skilled personnel, especially considering the rapid development and sudden changes in the fintech industry, employees of the relevant regulatory bodies are ready to learn and continue to shape the path for this sector in Croatia with domestic fintech companies.

‒ It is also important to mention that new laws are increasingly being adopted at the level of the European Union that further regulate various parts of the fintech industry, and Croatia, as a member state of the European Union, must implement those laws. It would not be bad if the implementation of new regulations and directives further encouraged new startups to innovate and develop new fintech products, and traditional financial institutions to engage even more with the fintech industry. Perhaps that will indeed happen ‒ said director Škorić.

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Nikola Škorić

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According to data from Business Croatia, Electrocoin achieved a total annual revenue of 76 million euros in 2022 and ended the year with a loss. But besides Electrocoin, which other financial technology companies have ‘all doors open’?

Expansion across Europe

The leading name in the Croatian fintech market is certainly Aircash, which achieved a total annual revenue of 20 million euros and a gross profit of 8.59 million euros last year.

As stated by Aircash, they see significant room for further development because ‘being a fintech company in Croatia automatically means that if you are licensed and authorized to operate throughout the European area, you should view the Croatian market as a great opportunity for business expansion across Europe’.

‒ Additionally, Croatia represents an ideal market for new companies that want to start their business and in the second phase expand across Europe. All of this makes the Croatian fintech market extremely interesting and dynamic ‒ they believe at Aircash, adding that their future plans are focused precisely on such development.

‒ Although we are already present in several key markets such as Germany, Austria, Slovenia, Romania, Greece, and Spain, we are soon expanding into the markets of Italy and France, thus ultimately expanding across the entire European Union. Accordingly, along with already popular services for purchasing tickets for Jadrolinija and buses, e-vignettes, parking, fee-free bill payments, and ENC top-ups, we are developing new services such as business accounts and all those services that facilitate the daily lives of our users ‒ stated Aircash.

Revuto is another player in the Croatian fintech market, achieving total annual revenues of 35 thousand euros in 2022 and incurring a loss of nearly 132 thousand. Just two months ago, this domestic startup conducted a crowdfunding campaign lasting only 24 hours in which investors received a stake in the company and projects. Along with the campaign, a card program for better subscription control was announced.

‒ We are ready for a new step in our business, looking for interested investors who will recognize the value of our project and help us launch the card program on the market. Through all activities so far, we have achieved significant growth, secured all regulatory approvals, integrated with partners, and we are fully ready to launch our most significant product on the market, Revuto debit cards. With this crowdfunding campaign, we want to offer small investors a stake in our company so that the project remains in the hands of the community that supports us, and our community grows with us ‒ commented CEO and co-founder of Revuto, Vedran Vukman, in April this year.

Intensive product development

That fintech over the last 35 years has been reduced to legacy applications and Excel sheets is claimed by Matija Nakić from the domestic startup Farseer, who said that the only thing that has changed in the last few years is the addition of mobile applications that depend on core legacy systems.

‒ Banking, at least here, still does not operate in real-time. This is unacceptable for a 24/7 global economy. The entire domain is ripe for serious disruption, and only startups can create that disruption ‒ stated Nakić.

Farseer belongs to the so-called ‘CFO Tech’ branch of fintech. It is a solution for planning and reporting financial and operational indicators aimed at enabling CFOs and their teams to manage the company more effectively and make informed decisions in significantly less time.

‒ Our solution is already in production with about 50 clients. Despite this, we are intensively developing the product. We have already started entering foreign markets. In the next year, we plan serious growth and scaling of operations ‒ Nakić stated.

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Matija Nakić

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Farseer achieved total annual revenues of 170 thousand euros in 2022 and ended the year with a loss of 298 thousand euros. The company raised 1.5 million dollars in the last seed investment round in February. Farseer was founded in 2020 by Zrinko Dolić, Luka Mijatović, Matej Trbara, and Matija Nakić, and in less than two years since its founding, it has positioned itself as one of the most significant competitors to IBM, Oracle, and SAP in the domain of financial planning and analytics solutions.

A major player in the Croatian market is also the company Elektronički računi, which stands behind the service Moj eRačun. The company achieved total annual revenues of 5.42 million euros and a gross profit of 1.49 million euros in 2022, and last autumn it also became a payment institution.

Namely, the Croatian National Bank issued a decision in September 2022 regarding the inquiry of the company Elektronički računi in the Register of Payment Service Providers and Electronic Money Issuers for the provision of two fundamental payment services: payment initiation service (PIS) and account information service (AIS).

‒ As an innovator in the digital business market, we have actively developed technologies aimed at enabling an innovative approach to financial services, making the financial system cheaper, more accessible, and more efficient for both service providers and consumers. The ePlati service (PIS and AIS) is the biggest revolution in payment transactions since the introduction of internet banking 20 years ago and, along with the introduction of the euro, certainly the most important event for business entities in Croatia ‒ emphasized Marko Emer, the CEO of the company, in reaction to the decision of the Croatian National Bank.

The need for a state fintech strategy

The company has been operating since 2014, and among other services, they have mojeRačun, mojDMS, mojeArhiv, and the business intelligence solution mojBI in their portfolio. They began their entry into the fintech market by collaborating on the development of PlatiMe, the first Croatian platform for the purchase of overdue eInvoices, and by developing ePlati, they focused on financial technology innovations and became the first private information intermediary in Croatia that is a payment institution.

On the list of companies defining the Croatian fintech market, Fonoa must certainly be included, a startup that has both Croatian and Irish addresses. The company was founded by former general manager of Uber Croatia Davor Tremac, along with Filip Štruman and Ivan Ivanković.

The company raised 60 million dollars in July last year, and the year before it raised 20.5 million dollars, targeting global companies that provide digital services, with the purpose of automating processes involved in managing sales tax, VAT, and goods and services tax. The platform is used by companies such as Uber, Bolt, Booking, and Zoom, and currently operates in 20 countries. To date, they have raised a total of 85 million dollars in funding, and the company’s value is currently estimated to be between 240 and 360 million dollars.

In 2022, they achieved total annual revenues of 1.18 million euros and a gross profit of 120 thousand euros.

In addition to the mentioned companies, it is also important to mention Rijeka’s Bizzaro, Zagreb’s Oradian, Monri Payments, and Corvus Pay, and from this year, the regional Leanpay is also operating in Croatia, which first offers the service of paying in installments at online and physical sales points based on the principle of ‘buy now, pay later’.

Fintech services in Croatia are also offered by almost all banks, and whether there is room for the development of new players in the domestic market remains to be seen.

‒ It is certainly worth being optimistic. We have excellent conditions for the development of fintech in Croatia. A handful of fintech startups have already proven to be very successful, and I believe that many others will follow in the coming years. The industry could always be further stimulated by a well-crafted state fintech strategy, but new ideas and innovations are always welcome. Nevertheless, in the long run, I certainly believe that Croatia has a great chance to become a kind of fintech hub in this region within the European Union that will actively encourage domestic companies while successfully attracting foreign ones ‒ concluded Škorić.