Balkan Business Brief

Serbia's startup ecosystem flourishes!?Record investments and promising potential!

According to the latest data released by the Slovenian VC fund, Silicon Gardens , the startup scene in Serbia has been on a remarkable trajectory, with a staggering influx of over €325 million in investments between 2021 and 2022. Thes figures not only?highlight?the maturity of the startup ecosystem but also underline the immense potential it holds. The numbers speak for themselves: with more than?six hundred?active startups and eight thriving development centers, Serbia strengthens its position as an attractive destination for innovation. Where are these substantial funds being directed, you might wonder? The answer lies in the most promising sectors of today's tech landscape: SaaS is in first place, followed closely by investments in Fintech and Enterprise software. Delving deeper into the investment landscape, venture capital funds dominate with a remarkable 87.5% of the total number of investments. However, in terms of investment value, funds account for a 52.9% share, while 38.2% belongs to private capital.?It is fascinating to note that a significant number of startups in the mentioned statistics were financed in the pre-seed stage, showcasing the entrepreneurial spirit and bold vision of their founders. The majority of investments come from the United States, followed by the European Union. In the broader regional context, Serbia proudly secures the third spot in terms of investment value. However,?it is?Croatia that currently leads the pack with an impressive €1.86 billion in investments, closely followed by Slovenia, which has secured €1.25 billion.

Why?the renowned Sea Dance festival?will?not take place in Montenegro this year?

The Sea Dance festival, which holds the title of the best European festival and is also one of the most significant festivals in the Mediterranean, will not be held on the Montenegrin coast this year. According to the organizers of this festival, the reason is the blockade imposed by state institutions, primarily ordered by the Competition Protection Agency. The mentioned agency categorized the collaboration between the festival organizers and the Municipality of?Budva?as state aid. The organizers argue that the commercial collaboration is transparent but primarily contributes to the goal of promoting tourism in?Budva. The imposed cessation of collaboration, directed at multiple institutions, has prevented the festival from taking place just a few months before the planned date. The festival organizers have announced that they will soon relocate to another location, mentioning Croatia, Bulgaria, and Turkey as potential countries. Do you consider this a fair and transparent approach by the institutions, or do you see it as a wrong step from the perspective of Montenegrin tourism?

Can consumers punish traders for high prices?

The inflationary whirlpool has been ongoing for a considerable?period of time, and predicting its cooling down is a rare claim. Alongside the inflation-driven growth, there have often been stories circulating that the situation is being exploited, and the rise in prices of certain goods and services is unjustified. However, what is the response from consumers? Can consumers punish traders for high prices? According to statistical data, retail turnover has decreased by 9% in Serbia, 12% in Slovenia and Hungary, while there is stagnation in Croatia. Additionally, statistical data indicates that consumers save the least on food items, while they tighten their belts for other products. Key factors contributing to price increases were geopolitical issues and a poor agricultural year. Although statistics show that the worst is over, inflationary pressure?still persists, and consumer sentiment is deteriorating. Economic analysts also suggest that inflation stabilization will be influenced by the market economy, free competition, and the real decline in demand.

Coverage of natural catastrophic risks in Croatia by insurance

Croatia is a country that is significantly exposed to natural catastrophic risks, with a very low level of insurance coverage. This fact highlights the urgency of strengthening financial literacy and the necessity?of increased broker engagement. Supporting these facts are the statistical data from the recent earthquakes in Croatia, where the earthquake damage in Zagreb and?Petrinja?was estimated at 128 billion?kuna, while only 0.5% was covered by insurance. The seriousness of the inadequate insurance coverage for natural catastrophic risks is further highlighted by the protection gap in Croatia, which amounts to 99%, while in developed countries, it ranges between 20% and 30%. Additionally, the problem of insufficient insurance coverage in the event of catastrophic natural events is reinforced by the fact that it represents only 1.7% of the total non-life insurance premium. Considering the rising insurance prices amidst strong inflationary pressures, broker engagement and efforts to provide suitable insurance policies for individuals and companies are essential.