Back to basics—challenges of the startup ecosystem in Bosnia and Herzegovina
Startup ecosystem development in Bosnia and Herzegovina is not always as fast as we’d hope to be, but it’s moving forward. Often in waves.
Startup ecosystem development is never linear, it evolves in waves. This makes the development complex and unpredictable. Occasionally, emerging ecosystems achieve sustained growth until their progress slows before beginning again. Bosnia and Herzegovina is a good example of this phenomenon.
2022 was quite promising, with exciting developments in investments and a few interesting startups emerging. As 2023 arrived, there was a decline in programs provided, in demand for support and investments and dealflow. This makes sense as 2021 and 2022 were peak years for VCs globally, before they reduced their activities due to the overall recession.
This iteration in the development of the startup ecosystem however, allowed Bosnia and Herzegovina to continue building their experience and grit, becoming wiser in preparation for the next wave.
Here are three reasons why we believe that the slight decline of early 2023 is simply a signal for a new wave of growth:
1. Limited support for growing startups
Idea stage programs are a key entry point to startup ecosystems. However, if they are the only type of support to be found, the ecosystem is either in its early stages or experiencing limited growth as a result.
Idea-stage support programs in Bosnia and Herzegovina have evolved in recent years and the organizations running them—such as International International Burch University (IBU) and Foundation 787 (F787) in Sarajevo, and Virtuo in Banja Luka—have themselves improved their capacity for delivery. They cater to the needs of first-time founders and introduce them to startup methodologies in an intuitive way.
IBU runs a regular Incubation program for its university students and has also organized a Start Me Up program for high school students to introduce them to the world of entrepreneurship. With extensive experience, IBU has developed an appealing curriculum and a good balance between learning and mentoring sessions. With 34 graduated startups, IBU provides the local ecosystem with a fresh flow of new founders.
As for Virtuo and Foundation 787, they joined forces for the first time in the spring of 2023 to co-create another edition of Katalizator. Katalizator is a tailor-made program for entrepreneurs who want to pursue their ideas and turn them into successful startups. In the latest edition of Katalizator, 10 startups participated and worked with a solid line-up of Swiss EP experts and partners as trainers and mentors, such as Josipa Majić, Filip Stipančić, Miro Hegedić, Peter Bruner, and Luka Prišunjak.
While all of these programs are custom-built, they struggle to attract quality teams to work with. Is the pipeline of new entrepreneurs drying out in Bosnia and Herzegovina? Or should alternative resources be developed to nurture the next generation of entrepreneurs? Time will tell.
2. Limited funding options
Funding is the most common obstacle in emerging ecosystems and an ongoing challenge for startups in Bosnia and Herzegovina.
While there was initial excitement surrounding the launch of BH TechLab, a local investment fund started by BH Telekom at the end of 2022, the first investments in local startups have yet to be made. However, with the advisory and support of Vladimir Ćorda and Ivana Stanković (both core Swiss EP team members), we hope for some positive news very soon.
Another investment instrument that appeared in the country is Angel Investors. After a few attempts to start local networks in previous years, we’re finally seeing some progress. Branko Kecman and his partners have formed Vrbas Capital group in spring 2023. Foundation 787 organized the second edition of the Business Angel Summit in October 2023 and announced the formalization of BHBAN (BH Business Angel Network). With a public roadmap and clear call to action F787 should make some positive movements very soon.
3. Keeping an eye on trends
At the beginning of 2022, we noticed an interesting trend: a number of service providers in IT started developing their own products. Our team has identified eight spin-off projects made by the same number of service companies.
To build on this, Swiss EP explored developing Product Development Programs with mature companies and their staff, but instead of a full-length program, we facilitated several meetups with Swiss EP experts Miro Hegedic, Filip Stipancic and Keo Sar. These informal events highlighted the main issues companies struggle with in product development, such as allocation of resources and finding suitable teams.
Will this product development trend continue? Or even accelerate after significant investment that one of the teams (Rolla, backed by NSoft received €6,3 million investment in august 2023) received in the summer? Swiss EP will continue monitoring the needs and requests of our local partners to assist wherever we can.
What is next for the startup ecosystem in Bosnia and Herzegovina?
Growth often happens in waves. Each time a new wave hits, the ecosystem reaches a new standard, raising the bar once more.
Startup ecosystem development in Bosnia and Herzegovina is not always as fast as we’d hope to be, but it’s moving forward. Often in waves. As it keeps setting the bar higher, we’ll continue to tag along for the ride, offering guidance and support as the need arises.