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.

As Novac/Boris Vlasic writes on the 23rd of April, 2020, the Zagreb-New York mobile app developer agency Five has received prestigious recognition, and is now ranked among the top three agencies on the respectable Clutch business platform by a competition of 480 agencies. This is yet another testament to the talent of Croatian developers.

Clutch is a platform that evaluates the quality of mobile applications based solely on reviews left by clients, and not the agencies themselves. This isn't some simple appraisal that comes with almost every application, but rather a serious review, which people from Clutch then check, further interview those same agency clients, and analyse a series of responses to avoid any subjectivism from the appraisal.

Five has been in New York for a decade now, ever since Viktor Marohnic went there, along with Luka Abrus and Sven Marusic, one of the co-owners of a company which boasts about 150 employees, and applied to Clutch three years ago, thinking that the references they would gain would be good recommendation for their further business development.

"We were never interested in the awards, we didn't spend our time doing that," says Viktor, who, like most people at Five, has been working out of the office, more precisely from home, for the past few weeks.

''What interested us at Clutch is that they were the only ones who offered a realistic assessment of our quality. It's especially different that they don't do the rating, but instead the clients for whom the work was done do it. Our rating comes directly from the clients themselves and this can't be adjusted. Clutch makes sure that every review is authentic. That prize is impossible to fake,'' says Viktor, adding that virtually every agency that has a profile on Clutch actively competes for the best possible position among other agencies.

Marriott International, a multinational hotel company with more than 200,000 employees, asked the Five team for an application to raise employee satisfaction, boast an employment chatbot, and other things.

''Five provided a level of engagement that is invaluable. Their team understood how people use technology, especially those targeted at the global level,'' wrote the director of the wellbeing sector at Marriott about the Five agency in a review on Clutch.

''The West Coast, or the Silicon Valley, is the centre of the world when it comes to VC funds and the Hi-Tec startup industry. On the other hand, the East Coast, or NY, is the epicentre of events in the agency business,'' says one of the Croatian developers, Sven Marusic.

''What used to be agencies on Madison Avenue are now slowly moving into the digital world, and therefore the mobile app world. The competition is huge, so this recognition certainly means that we've become a relevant player globally, now recognised by an independent service such as Clutch as one of the leading ones,'' says Marusic, describing how crucial to their acceptance in the US market was in terms of their decision to become an American company .

At that point, they stopped being a Croatian company with clients in America, and instead became an American company whose main people for sales, design, product definition, consulting and other jobs are Americans.

''In Croatia, we're an IT company with a strong focus on design and clients in America. In America, we're a New York-based agency with a strong development and design team in Croatia. We believe that our key to success was precisely in that step forward and in building a team based in New York. It was also a big risk that's now slowly paying off,'' says Marusic between two zoom meetings.

That's how everyone works, the coronavirus pandemic just changed their location, but it had no effect on the business of these talented Croatian developers and the company Five. Clients expect the realisation of commissioned projects, this is one of the evaluation items at Clutch, and five received five out of a possible five stars for each criterion.

For more on Croatian developers and other talent, follow our dedicated Made in Croatia page.