Serbian Minister of Economy, Sasa Radulovic, announced today that beginning next year Serbia will start a 35 million euro co-fund intended for local startups. The government will co-invest from 20 to 40 percent with foreign investors, who are to be attracted to this South-East European country, which is slowly but surely starting to forge a startup ecosystem.
Announcement took place at Belgrade Venture Forum, largest venture capital conference in the Balkans. Minister Radulovc stated that the Ministry of Economy has put startups into 2014 budget plan. By closely examining Israeli’s startup model, Serbian government decided to help entrepreneurs by attracting foreign investors and co-funding local projects with them.
However, much remains to be seen. Although Serbian startup ecosystem grew significantly during the past couple of years, bureaucratic hurdles are still troubling local entrepreneurs who are much more worried about taxes than the lack of money. One might strongly suggest that working on fixing these issues should come before starting an investment co-fund.
Furthermore, spending taxpeyers’ money while fighting recession might look strange to somebody, but from Ministry of Economy comes bold reassurance that this is part of a long-term strategy which aims to lure foreign investors and their assents to Serbia.
‘Startup Serbia’ Falls Into Abyss
This is not Serbia’s first go at state-run investment fund. This summer, a unique seed fund was announced which promised foreign investors up to 25,000 euros for a 50-50 investment deals. However, this project was never brought to life as the previous Minister of Finance and Economy Mladjan Dinkic (who was pushing the deal from the get go) was overthrown.
Current Minister, Sasa Radulovic, never spoke about this project but instead, has created a new solution which is a “part of the bigger plan to attract foreign capital into Serbia.”
Although having a state fund could be a good thing for local startups and the ecosystem itself, the question still remains whether or not the current office will fight against bureaucratic issues which are troubling entrepreneurs for years now, forcing them to move their businesses out of the country.