Start-up to Scale-up: EIF, HBOR and Croatia scale up partnership to boost venture financing in the country

This article is published in association with European Investment Bank.

• Over the past 8 years, EIF, HBOR and the Ministry of Regional Development and EU Funds have mobilised €270 million in public investment supporting around 200 innovative Croatian companies;
• The CVCi and CROGIP programmes have built a modern innovation financing ecosystem in Croatia, enabling start-ups and scale-ups to access capital, grow faster domestically, create jobs and strengthen competitiveness
•  The partnership continued with a second generation of investment funds and stronger links to regional and European investment platforms; support is expected to reach up to 500 companies, alongside continued mobilisation of private investment.

Hrvatsku inačicu preuzmite ovdje

Over the past eight years, the partnership between the European Investment Fund (EIF), the Ministry of Regional Development and EU Funds of the Republic of Croatia and the Croatian Bank for Reconstruction and Development (HBOR) has mobilised €270 million in public investment and has already supported around 200 innovative Croatian companies. With the continued rollout of these programmes, the number of supported Croatian companies is expected to grow to 500. Under the EIF management these investments have had a strong multiplier effect.

Their expected aggregate size of the underlying funds at final closing of around €700m, reflecting the total capital mobilised, including institutional and private investors.

Through the partnership launched in 2018 to modernise Croatia’s financial market and backed by the European union funding, Croatia built a venture capital and growth finance ecosystem that barely existed a decade ago, giving companies access to risk capital and scale up financing comparable to that in more mature EU markets. As a result, Croatian start-ups and growing companies can now raise capital locally, scale faster, attract private investors and compete internationally without having to leave the country to finance their growth.

These programmes have invested in innovative companies across Croatia from Biovega’s sustainable retail expansion to innovative tech firms like Bloq.it, Entrio, GameBoost and Hypefy, as well as platforms like Flexkeeping and Native Teams, and manufacturers such as CupUp. The partnership also invested in the “Vesna Deep Tech Venture Fund”, the first fund of its kind in Croatia, which finances the conversion of cutting-edge research from Croatian universities and scientific institutions into commercially viable business ventures.

These achievements were highlighted at the conference “Start up to Scale up – Croatian Venture Capital Initiative & Growth Investment Programme” held at the European Parliament Information Office in Zagreb, which brought together public sector representatives, investors and entrepreneurs.

“The EIB Group has played a key, indeed catalytic, role in launching and strengthening Croatia’s innovation ecosystem, helping to bridge the gap between Croatian start-ups on one side and venture capital on the other” said Vice-President Marko Primorac, in charge of EIB Group operations in Croatia.

“Over the past eight years, we have built strong financial foundations, as an essential condition for the success of innovative Croatian companies, and opened up new sources of financing that simply did not exist in Croatia less than a decade ago. We have mobilised around €270 million in investments from public sources alone, Croatian, European and EIF funds.”

Four investment programmes for a modern capital market in Croatia

Through four complementary investment programmes – two under the Croatian Venture Capital Initiative (CVCi I and II) and two under the Croatian Growth Investment Programme (CROGIP I and II) – public funds have been mobilised under mandate commitments.

These funds have attracted significantly larger volumes of private capital, which have in turn supported around 200 Croatian start-ups and companies through venture capital and private equity funds.

What we see in Croatia is the power of partnership and continuity. ”

– Marjut Falkstedt, EIF Chief Executive

“By building steadily since 2018 and expanding what works and delivers, this partnership is turning innovation into lasting social and economic growth. Croatia is now well on its way to a strong financing ecosystem that allows innovative companies to grow and stay in Croatia and the EU.”

EIF’s role as a cornerstone investor has been critical in crowding in private capital, attracting new fund managers and increasing the availability of risk capital for Croatian start-ups and companies in the scale-up phase. EIF support in Croatia spans the entire development pathway – from acceleration and technology transfer to growth capital, social impact and infrastructure-related investments.

“The partnership between HBOR and the EIF has played an important role in broadening access to capital for Croatian companies and strengthening the investment landscape in Croatia. Through a range of financial instruments and investment programmes, we have helped businesses secure the resources needed to grow, innovate and become more competitive”, said Alan Herjavec, Member of the Management Board of HBOR.  “While the progress achieved over the past years is clearly visible, we see considerable potential for further development. Together with the EIF, we remain committed to creating new opportunities for Croatian companies and supporting their long-term growth and international competitiveness.”

“The Government and the Ministry of Regional Development and EU funds of the Republic of Croatia, in collaboration with the EIF, have been steadily mobilising private capital alongside EU funds for the second generation of venture capital funds, thereby generating a threefold investment volume in the most promising start-ups, while positioning Croatia globally as a dynamic capital market and attracting innovative talent,“ said Domagoj Mikulić, State Secretary at the Ministry. “We are proud of the number of nominated fund managers and founders who have received EU funding, and we anticipate new Croatian unicorns and strong growth following more than €200 million in expected future investments. “

From innovation to jobs

The venture capital programme CVCi I, launched in 2018 with €35 million from EU structural funds, established the first institutional venture capital fund in Croatia with an accelerator component. Through this fund, 145 start-ups were supported.

“Built on the success of CVCi I, the second-generation instrument CVCi II was established for the 2021–2027 programming period, with €60 million secured from EU funds within the Ministry of Economy’s State budget through to 2028,” said Goran Romek, State Secretary at the Ministry of Economy. “Supporting innovative and high-growth companies is an investment in the future competitiveness of the Croatian economy. Our objective is to ensure that promising entrepreneurs and innovators have access to the capital, knowledge and partnerships needed to develop new products, scale their businesses and compete globally. The progress achieved over recent years demonstrates the importance of sustained cooperation between European institutions, national authorities and private investors in building a stronger innovation ecosystem and unlocking new opportunities for economic growth.” 

CVCi II is expected to mobilise more than €200 million in investments for Croatian companies. In parallel, two CROGIP programmes have introduced growth, private equity and mezzanine financing options to the Croatian market, supporting companies beyond the start-up phase and helping build a functioning scale-up and growth capital ecosystem.

The partnership is now continuing to further integrate Croatia’s capital market with European investment initiatives. Croatia’s participation in the Three Seas Initiative Innovation Fund exemplifies this move towards regional and pan-European platforms capable of pooling larger volumes of capital and delivering investments at greater scale, allowing innovation to drive job creation and the global competitiveness of Croatia’s economy.

Background information

EIB Group

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. Built around eight core priorities, we finance investments that contribute to EU policy objectives by bolstering climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and bioeconomy, social infrastructure, the capital markets union, and a stronger Europe in a more peaceful and prosperous world. 

The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.   

All projects financed by the EIB Group are in line with the Paris Climate Agreement, as pledged in our Climate Bank Roadmap. Almost 60% of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.   

Fostering market integration and mobilising investment, the Group supported a record of over €100 billion in new investment for Europe’s energy security in 2024 and mobilised €110 billion in growth capital for startups, scale-ups and European pioneers. Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower than the EU average. 

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Croatian Bank for Reconstruction and Development

The Croatian Bank for Reconstruction and Development (HBOR) is the national promotional and development bank of the Republic of Croatia. Through lending, guarantees, export credit insurance and investment programmes, HBOR supports the development of the Croatian economy, with a particular focus on entrepreneurship, innovation, exports, sustainable development and regional cohesion.

In cooperation with the Government of the Republic of Croatia, the European Union, international financial institutions and commercial banks, HBOR facilitates access to finance for businesses and public sector entities throughout Croatia.

Ministry of Regional Development and EU Funds

The Ministry of Regional Development and EU Funds of the Republic of Croatia is the government body responsible for planning and implementing regional development policies, as well as managing the allocation of European Union funds to reduce regional disparities and promote economic growth.