What can ICT Hub Venture offer to startups? – Another two invitations for software solutions in industry to follow in 2017

Seven Serbian businessmen founded the first private investment fund for startups in Serbia, worth a million euros, on January 15. The ICT Hub Venture fund has organized a contest through which EUR 30,000 will be invested in the next 24 months in up to 30 newly founded companies from Serbia and the region. The first invitation for startups is open until March 17, and another two will be organized by the end of 2017.

This is the first local fund meant for startups in early phases of development which offer software solutions for problems in all fields of industry, says Kosta Andric, the fund’s managing director, for eKapija.

– ICT Hub Venture is a result of three years of operations of the ICT Hub incubator, which provides support to people just starting a business. We organize one-year mentorship programs for teams with ideas for technological solutions for industry problems and ideas for startups. The program aims to help them validate their idea and see if there’s a market for it – our interviewee explains.

There are two possible outcomes for startups – failure to find a market for their product or the validation of the idea, reaching first clients, proving the premises set at the beginning, expanding the business and becoming independent, Andric says.

However, the most frequent obstacle to initiating the idea is finding the money.

– When we started, the majority of people initiating startups had only just graduated from faculty. What we’re seeing increasingly more often now is people over 30 initiating their own startups. They’ve had the opportunity to work in the industry and to target the problems that can be solved with technology. They’ve proven that their project is justifiable, that there are potential opportunities, but they are in the early stages, when the sales have not yet developed, meaning that there are no funds which can finance them. We started with the idea to further strengthen the field of startups in Serbia, to secure investments, that is, the financing of projects in their early stages. We started talking to potential investors, which had a strong technological component, and that’s how ICT Hub Venture came to be – Andric says in his interview for eKapija.

The fund was founded by seven businessmen from Serbia – General Manager of Imlek Ilija Setka, Playerhunter GmbH CEO Stevan Radak, Orion Telekom CEO Slobodan Djinovic, founder of ICT Hub Dejan Randjic, co-founder and CEO of the Alba Partners consulting company, Marko Hinic, as well as Slavko Andrejic and Dragoljub Vasic. A total of a million euros invested will be distributed across 30 projects at the most in the next two years, and the founders of each of the startups to receive the funds will have a 5-15% share, depending on the company’s maturity, the height of the investment, negotiations...

All startups oriented towards the business and problem solving in traditional industries, such as agriculture, can apply, Andric explains.

– We are primarily interested in “business to business” products for solving a problem in an industrial branch. It doesn’t matter what industry it is. Any field where IT can contribute to the optimization is in our focus. This fund opens the door to a new target group – those who are dedicating themselves to their own startups in addition to having another job. Due to a lack of funds, they can’t fully dedicate themselves to startups only, and this early capital is there to enable them to do so. The fund opens the door to people who have perhaps not been ready to make a full step, quit their jobs and dedicate themselves solely to the new business – Andric says and adds that they are, nevertheless, not the primary target group.

Aside from the financial aspect, the fund will also be providing various aid programs, mentorship and help in connecting with the industry, as well as potential investors, in the next stages of development. One of the criteria for the selection of teams will be who the team consists of and what the connection of the founder of a startup is with the industry and the problem they want to solve, i.e. whether they possess the necessary skills.

– It’s important to have a business-oriented person in the team, as well as a programmer, a designer, a communicative person with developed presentation skills. It’s also important for at least one team member to have relevant experience in the business domain within the industry in question. The team members have to complement each other and they need to have an idea about the direction they want the team move in. They all need to have the same motivation, be dedicated and think like entrepreneurs.

Another important criterion is the potential of the product in question for growing and attracting a large number of users, without having to be adjusted for each of them individually.

– For example, everybody uses Skype in the same way. We are looking for that kind of a universal product.

Finally, there is the technological criterion – whether the team is capable of actualizing its idea, what technology is being used and what previous experience in using the technology in question it has.

Lack of success is justified

If it turns out that there is no demand for a given solution in the market, the fund is prepared to share the fate of the company, Andric explains and adds that risk and failure are a part of the job.

– Let me be clear, if it turns out that there is no market for the solution presented by any given team, those people don’t in any way owe us money. By entering their company through shares, we become their partners. Failure can happen, but it should be treated as a lesson when trying again. We are looking to free failure of the stigma it has in Serbia.

The current plan is for ICT Hub Venture to last for two years, and if it turns out to be a good option, there’s a possibility of expansion as well, even in the region. Still, as Andric says, it’s too early to talk about this.

Applications are submitted through the website, and the first selection round will be followed by interviews with the selected teams.

Katarina Stevanovic