March the 5th, 2021 - If you read the Croatian headlines, you´ll notice the trend of doom, gloom and everything is terrible. It isn´t quite so. There are many entrepreneurial stories up and down the country gaining both traction and deserved success, and the Zagreb agency Five is just one of them.
As Telegram/Ivan Luzar writes, the Zagreb agency Five, by this point already very well known as one of the most successful startups from Croatia, has been sold for an enormous amount and is becoming part of the international Endava software group. The amount of the transaction stands at a whopping 40 million US dollars, equivalent to about 250 million kuna, which puts the Zagreb agency Five on the list of the largest digital acquisitions on the Croatian market.
The Zagreb agency Five was founded back in 2005 by Viktor Marohnic, and five years later it was joined by current partner and co-owner Luka Abrus. They have 220 employees in Zagreb, New York, Osijek, Rijeka and Split, with a focus on programming and marketing services for American clients.
"For us, this is a new and exciting chapter," Five told Telegram. “As part of Endava, a company thirty times bigger than Five, we´re going to be able to undertake much bigger projects, for much bigger clients, than we could do on our own. This is as if we have accelerated five years of development and achieved it immediately,"
Negotiations lasted for months
Negotiations on this matter have been going on for months now, more precisely since November last year. Five’s customer, Endava, is a technology company specialising in business solutions, with 7,500 employees in 33 offices worldwide. They are headquartered in the British capital of London and are listed on the New York Stock Exchange. The current market value of Endava shares stands at 5.4 billion US dollars.
In an official acquisition announcement, representatives of the group point out that the Zagreb agency Five was interesting to them because of its extensive American operations and its work with clients such as Rosetta Stone, Mariott, Starz, Napster, Penguin Random House, McAfee and other well known names.
“They´re a brilliant team and they will bring additional skills to Endava, especially when it comes to production strategies and growth optimisation,” said John Cotterell, the CEO of Endava. "Additionally, their reputation as a leading New York-based agency in Croatia is complementary to our strategy and further strengthens our presence in the Adriatic region."
Marohnic, Abrus and Marusic all plan to stay with the Zagreb agency Five until further notice
In an interview with Telegram, managers Marohnic, Abrus and Sven Marusic all say that their decision was not easy, but they believe that they did the best for the company and all of its dedicated employees. At the operational and management level, they plan to stay with Five until further notice and work on projects as if nothing has changed.
"Last year I thought I would spend my whole life in this company," says Marohnic. “I founded Five with a simple idea: to create jobs for young and busy developers like I was. At the time, we were reading about the successes of startups in the Silicon Valley in the US and we wanted to get a chance to show how we can be just as good as them. At first, I was just happy to be able to pay my bills.”
It was time for a new and daring business jump...
The Zagreb agency Five, meanwhile, was developing extremely rapidly - about 500 people have passed through the agency in just fifteen years, he says - and it was time for a new venture. In recent years, Marohnic, Abrus and Marusic had been thinking about possible steps forward for Five. They considered, they say, buying smaller companies, as well as seeking out strategic investments that would significantly accelerate business growth.
The third option was to sell the Zagreb agency Five to a much larger group, within which they could take up even more advanced and interesting jobs. After meeting people from Endava, they concluded that they have very similar business and cultural values, and decided to talk to them. “After a lot of thinking, I decided this was the best decision. I guess it’s like with kids, as they grow up, it’s time for them to spread their wings and leave home. It is emotionally difficult, but you know rationally that it´s the right thing,¨ said Marohnic.
Opportunity for growth in all segments
"We´re looking forward to having a joint market presence, new opportunities that will open up to us as a result of this cooperation and opportunities for growth across all business segments," noted Marusic. ¨With this transaction, our people will get the opportunity to work on even bigger projects, with global clients. We believe that this strategic turn in business enables us to make a quantum leap into the future of digital agency business.¨
Over recent years, acquisitions and investments in Croatian startups have taken place more and more. Back in December last year, it was announced that the well known Croatian gaming company Nanobit had been sold for 148 million euros, and large investments were being handled by companies such as Rimac Automobili and Photomath by Damir Sabol.
For more on Croatian companies, follow Made in Croatia.
