Google’s recent acquisition of Croatia-based math app Photomath has brought the country’s thriving tech industry back into the spotlight. With local media suggesting that the acquisition price could be between 220 and 500 million euros, the deal represents a significant achievement for the Croatian startup scene.
As one of the region’s most successful exits to date, this deal highlights the growing dynamics and potential of the Croatian technology ecosystem. Using Photomath’s technology and Google’s resources, the acquisition opens the door to exciting possibilities and innovation opportunities.
“We can confirm that we have entered into an agreement to acquire Photomath in May 2022, subject to regulatory review. Photomath’s technology will help Google improve its ability to provide better math learning experiences for students, helping to expand Google’s homework help offerings for users,” a Google spokesperson said. said Reuters, adding that EU antitrust regulators now have until March 28 to approve the deal or suggest further investigation.
The inspiration to found Photomath came to Croatian entrepreneur Damir Sabol at a time of frustration and helplessness. As a father, he struggled to help his sons with their math homework, feeling unable to provide them with the guidance they needed.
It was on one such occasion that he realized the potential of technology to revolutionize the way students learn mathematics, and in 2014 he founded Photomath, a smart camera calculator that allows students to users to point phone cameras at a mathematical formula and instantly receive an answer. Previously, Sabol also founded another successful Croatian company: Microblink, a mobile payment application with text recognition.
Her latest venture has achieved significant fundraising over the past few years: in 2021, she managed to attract $23 million, and it was around this time that she also achieved her greatest popularity, when she has been downloaded more than 220 million times.
According to regional venture capital fund South Central Ventures, while the Croatian ecosystem has boomed in recent years, the Photomath deal is another testament to the country’s ability to be resourceful when it comes to is about creating global businesses.
“The acquisition of Photomath once again confirms that global companies can be established in Croatia. The acquisition by Google means that global funds and clients will be even more interested in IT companies, and we are extremely proud to be part of this ecosystem,” Vedran Blagus, director of SC Ventures, told The Recursive.
“One of the defining moments of the Croatian technology ecosystem”
For Croatian economic journalist Bernard Ivezic, the Croatian startup ecosystem has never been so close to the Skype effect observed in Estonia or to its own PayPal mafia that ruled Silicon Valley.
“Google’s acquisition of Photomath allows this to happen in Croatia. Photomath founder Damir Sabol was the first local startup founder to make a massive exit 17 years ago, and now he’s doing it again, but at least 10 to 20 times more lavishly. Last year, Startup Report magazine found that more than ten local founding investors were already funding Croatian startups. The biggest was Sandro Mur of Bellabeat, who invested €6 million in Croatia’s first fully local venture capital fund, Feelsgood. The basis of the Skype effect therefore already exists locally. If Damir Sabol decides to ride this wave, it will become The Wave! Ivezic, who is also editor-in-chief of Startup Report magazine, tells The Recursive.
According to Ivan Brezak Brkan, founding editor-in-chief of Netokracija, the Photomath deal will also go down in history as one of the defining moments of the local technology ecosystem and prove that global B2C products can be built from Croatia.
“While we have seen a number of positive results for Croatian technology in recent years – from Rimac Automobili and Infobip becoming unicorns thanks to the acquisitions of Nanobit and Five – these were either companies in the B2B sector, or a very specific industry (gaming) in the case of Nanobit,” explains Brkan.
However, the acquisition of Photomath is different for two reasons, he emphasizes.
“First, Photomath is a very popular B2C mobile application that has been downloaded over 250 million times. Secondly, Photomath is going to be acquired by Google, one of the “Big Tech” companies, which in itself is a recognition for the Croatian technology community,” says Brkan.
Brkan is also adamant that while founders like Sabol had to fight an uphill battle to convince investors that it was possible to create a B2C product from Croatia, future founders will find it easier to raise capital through to the efforts of him and his team.
“I am very interested in how Damir will work with future Croatian founders, especially since he now has capital to invest in startups. It wouldn’t be his first time: he already co-founded ZIP, a startup incubator in Zagreb. Although he stated that investing in startups is not for him, he invested in other founders so that he can decide after the acquisition,” explains Brkan.
Furthermore, a deal with a potential value of up to half a billion euros could bring unprecedented numbers to the Croatian startup ecosystem, Ivezic points out.
“Croatia already has two unicorns, Infobip and Rimac, at least ten Soonicorns and 900 active startups. Multiply anything by 10 to 20 and forget about evolution: this is a moment of transformation that we are approaching,” he concludes.
