Startup activity gradually increases
Although exact figures for venture capital funding in BiH are not readily available, there are signs of nascent but growing startup activity in the country. The emergence of local investment funds such as BH TechLab and angel investor networks such as Vrbas Capital and BHBAN (BH Business Angel Network) in 2023 signals the maturation of the ecosystem.
Key sectors driving growth
Although BiH exhibits a diverse range of startup activity, a few areas stand out as particularly strong.
Fitness technology: Mostar-based Rolla has secured significant seed funding of €6.3 million in 2023, demonstrating the potential in this field. Health tech: Neybox Digital is making strides with wellness apps like Pillow and Today. Mobility: Founded in 2020, Beebee is a pioneer in eco-friendly transportation through shared electric kick scooters.
Revitalizing the ecosystem with government and international support
Support for the startup ecosystem comes from both domestic and international sources.
Unique advantages over established hubs
BiH may not yet reach the scale of London or Berlin, but it has clear advantages.
Cost-effective talent: Get access to high-quality technical talent at competitive rates. Less competition: With fewer startups vying for attention, it’s easier for up-and-coming companies to stand out. Untapped markets: BiH provides access to the wider Balkan region, a rapidly growing but relatively underserved market. Cultural Bridge: The country is strategically located between the emerging markets of Western and Eastern Europe.
Featured startups and success stories
BiH has produced several promising startups and success stories.
Corporate performance Rolla Fitness Tech Seed funding of €6.3 million eKupi E-commerce Expansion across the Balkans Neybox Digital Health Tech Successful wellness app E387 Cleantech First locally made EV charger Gotiva Games Gaming Creator economy innovation SympoQ Customer support AI-powered solutions Ruya Genomics bioinformatics VC-backed forensic bioinformatics solutions
Evolution of the development shop
BiH is known for its strong outsourcing and IT services sector. This foundation is currently evolving.
Many IT service providers have started developing their own products, and Swiss EP has identified eight spin-off projects from service companies in 2022. This trend could lead to a new wave of innovative startups leveraging existing technological expertise.
Rising Star: Potential Unicorn
Several startups in BiH show great growth potential.
Laura: With our recent funding, we are in a position to revolutionize the fitness industry. A highly experienced founding team with previous notable success with nSoft software. E387: Focus on EV charging infrastructure aligns with global clean energy trends. Gotiva Games: Revolutionizing the games industry’s creator economy. Ruya Genomics: Bioinformatics-powered intelligence based in Dubai. Ministry of Programming: The digital product studio that built Soundscape and Amuse.
Active support organizations within the region
Several organizations actively support the BiH startup ecosystem.
assignment
Limited funding options: The lack of diverse funding sources remains a major obstacle for Bosnian startups. While initiatives like BH TechLab and angel investor networks are emerging, the funding landscape is still evolving compared to more mature ecosystems. Brain drain: Bosnia and Herzegovina faces a significant migration challenge. The country’s population fell from 4.3 million in 1991 to 3.5 million in 2013, according to the World Bank, potentially limiting talent and entrepreneurs. Complex political structure: The country’s unique tripartite presidential system and division into two major regions and multiple states can create bureaucratic hurdles for startups. Limited support for growth-stage startups: While there are programs for idea-stage startups, there is limited support for growing companies, which can create bottlenecks in ecosystem development. Economic inequality: Social and economic inequality is increasing, especially in rural areas, and can limit entrepreneurial opportunities outside of large cities. Gender inequality: Only 34% of working-age women are employed or actively seeking work (compared to 57% of men), so there is a large gender gap in the labor force. That can extend to the startup ecosystem as well.
opportunity
Strong technical talent: Bosnia boasts a large technical talent pool, especially in outsourcing companies in Sarajevo, Mostar and Banja Luka. This talent could be leveraged to build an innovative startup. Design and UX skills: The country has demonstrated strong capabilities in design and user experience, which are essential for creating competitive digital products. Expanding support programs: Entrepreneurship programs and incubators are expanding across the country, creating more opportunities for aspiring founders to enter the ecosystem. Emerging Angel Networks: The establishment of angel investor groups like Vrbas Capital and BHBAN can help fill the early-stage funding gap. Product development trends: A notable trend for IT service providers to develop their own products can lead to innovative spin-off startups. International interest: Programs like the Swiss Entrepreneurship Program demonstrate the growing international interest in supporting Bosnia’s startup ecosystem. It is also very beneficial to engage with prominent members of the Bosnian diaspora such as Damir Becilovic of Index Venture, Dino Becilovic of Aven, and Amir Salihefendik of Doist. Untapped market potential: With a population of 3.5 million and connections across the Balkans, startups have the potential to meet local needs and expand regionally.
The road ahead
Although Bosnia and Herzegovina’s startup ecosystem is still in its early stages, it shows promising signs of growth. The combination of strong technical talent, new support structures and growing international interest lays the foundations for future development.
But to truly thrive, the ecosystem must address its key challenges. Expanding your funding options is critical, especially for growth-stage startups. Efforts to stem brain drain, promote gender equality in entrepreneurship, and connect with the diaspora can help expand the talent pool. Simplifying bureaucratic processes and creating more supportive policies for startups could also accelerate growth.
Martin Bjergegaard, an author and investor who spent time observing the ecosystem in Bosnia, says, “The development of a startup ecosystem is never linear, but evolves in waves.” Bosnia may have experienced a slight dip in early 2023 following the global venture capital slowdown, but this could simply be a stepping stone to the next wave of growth.
The country’s startups are increasingly looking outside their local markets, with companies like eKupi and Rolla showing potential for regional and international expansion. This external focus and expansion of domestic support infrastructure could be the key to Bosnia and Herzegovina establishing itself as a new center of innovation in the Balkans.
As the ecosystem continues to mature, tracking key metrics such as the number of newly founded startups, total investment raised, and startup survival beyond the first year will help determine the health and growth of the ecosystem. is very important in evaluating. Comprehensive data is currently limited, but the establishment of more formal structures such as BHBAN and increased international attention may lead to better documentation and understanding of ecosystem development.
In conclusion, Bosnia and Herzegovina’s startup ecosystem shows resilience and potential, even in the face of significant challenges. With continued support, strategic investment and policy improvements, the company has the opportunity to become a notable player in the broader European startup industry. The next few years will be critical in determining whether the country can build on its strengths and overcome the hurdles to foster a truly thriving startup ecosystem.
Josipa Majic is a serial technology entrepreneur with over 10 years of experience building scalable technology ventures. He leads product and development teams, sells and co-develops products to Fortune 100 customers, and raises capital from professional investors worldwide.
