Tips for outsourcing to the Balkans
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Photo Credit: GFDL / Creative Commons

When when it comes to tech, one immediately thinks of Silicon Valley. But chances are that you might be missing the action in the Balkans: Let’s name a few startups that might change your opinion.

Digjitale

It may surprise you to hear that Southeast Europe is driven by a highly skilled – skills that reflect a tradition of strong math and engineering education that goes back to communist times – and certified workforce, with technical expertise, low prices, no language barrier and quite the proximity to Europe, which makes things quite convenient for communication and flight connectivity to European cities. And on top of everything, the Balkans are not shy of entrepreneurs.

When when it comes to cutting edge research and technological development, one of course thinks first of Silicon Valley. But chances are that you might be missing the action in the Balkans: Let’s name a few startups that might change your opinion.

1. Nordeus – Thanks to their hit game Top Eleven, this Serbian company has become one of the most successful and largest gaming companies in Europe. It has offices across the world and more than 150 employees out of which, according to the head of the company Branko Milutinovic, only one has left the team.

2. Rimac – The Tesla of the Balkans and based in Croatia, Rimac develops and produces high-performance electric vehicles, drivetrain and battery systems. Rimac Automobili’s first model, the Concept One, is known as the world’s fastest production electric vehicle. The company has more than 50 employees and is continuing its research and development in the electric car industry.

3. Launchub and Eleven – Two of the coolest acceleration programs of the region are these two, the first one with a €9 million seed and acceleration fund and investments of up to €200,000 per company for 8-10% equity, and the second one with a €12 million venture capital fund. It’s not much compared to the 10 times larger funds from Western Europe, however for the Balkans, this capital is more than welcome. The number of VC funds is increasing.

4. Telerik – Telerik is a company based in Bulgaria that enables its 1.4 million strong developer community to create compelling user experiences across cloud, web, mobile and desktop applications, and last year, it was acquired by Progress Software Corporation for€262.5 million. It employs over 700 people in different offices across the globe.

While we are discussing the acquisition list, we can also mention that Facebook announced in July that it was buying LiveRail, a video ad company co-founded by two Romanians, for a reported $400-500 million.

Bulgaria is one of the top outsourcing destinations

In 2014, the 2014 AT Kearney Global Services Location Index ranked Bulgaria, a country that has a 10% flat tax rate, as one of the best outsourcing destinations in the Balkans, and listed it among the Top 10 most attractive worldwide outsourcing destinations. Bulgaria is home to advanced local and international companies, including the names of companies like Ubisoft, HP, IBM or SAP. Romania also ranks highly with a solid ground of university educated talent. Most have a strong background in German, and many have skills speaking various other languages as well.

However, it’s more difficult to find tech companies the likes of those mentioned above in the smaller regional countries like Macedonia, Albania and Kosovo. We’re not talking here about companies that deal with government procurement and the resale of tech equipment, but those who deliver and develop their own products or outsourced ones. Still, there are a few, which we will mention below.

A moment of growth

In Albania, there’s iKub, which has a couple of services in line and in use throughout the market, and EasyPay, which serves as the local Paypal of Albania, offering amazing mobile and online services throughout Albania since December 2009.

Kosovo is moving forward in an interesting way as well, sometimes faster and sometimes slower. Outsourcing seems to become increasingly interesting ever year, especially because the country doesn’t apply VAT to companies that outsource. That being said, cases like when 3CIS was put under fire by the tax authority didn’t help in 2014.

The good side of the story is that the company is slowly recovering and gaining new contracts ahead in the telecom industry, where Kosovo is quite strong on Certified CCNA and CCNP professionals, and this company is one of the strongest employers among the telecom providers, with cases where they had up to 170 people engaged in different projects.

Other companies that are delivering on outsourcing services include companies like Appsix, which specializes in mobile application development with a whole set of services from UX/UI up to backend/API design, and Sprigs, which is a Kosovar-Dutch company offering software development services to local and foreign customers with a great combination of Dutch flavor and local development skills.

Entermedia has created a new way to cooperate locally and joined forces with Frakton and ProjectGraphics, two creative companies, to deliver a bundle of outsourcing services. They have already established an office in Germany to serve as an intermediary for the work. The strong Albanian diaspora in Switzerland, Austria and Germany makes a good point of sales for the establishment of back offices in Kosovo. This way of working has grown rapidly in the last several years and we have cases like Baruti, which has managed to offer top quality call center services to the Swiss market and others.

As one of the fastest growing industries in Macedonia, with a growth rate of 47% in the last five years, the tech and software sector is of growing importance for the overall economic development of the country. There’s a number of countries that outsource to Macedonia and the number of local startups that are making a mark on the map is growing. g6 is one of them, with their focus on outsourcing and product development as well.

Not under the radar anymore

But the demand is growing and if the salary growth keeps this pace in Bulgaria and Romania, this could be a great chance for the Western Balkans to attract big companies that need outsourcing partners. What it takes is the right government approach in policy making, educational programs adjusting based on market needs, and attention to practical matters of foreign donor investment, which in some cases result in the expenditure of millions. Things are changing in Eastern Europe and it’s becoming competitive and lucrative for everyone in the tech sector.

It’s not unknown anymore. It’s not under the radar anymore. The Balkans have started to become boring and fade away from the international media as a region known for troublesome times, war and troubles between neighbors. This is not the case anymore. Now, the real question is whether Balkans can keep up?

This post was originally published on Digjitale

Featured Image Credit: GFDL / Creative Commons

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Celik Nimani

About Celik Nimani


Managing Partner and Chief Operating Officer at Appsix. Steers the strategic and corporate development of the company. Founder of Digjitale, a leading source for startups and entrepreneurs in Western Balkans since 2012. An entrepreneur by heart, quick-thinker and eagle-eyed for precision.

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