In the fifth episode of SoMoCast, Davor Tremac, founder and CEO of Fonoa, shared intriguing insights into his company’s journey from a local startup to a global leader in tax technology. Based in Zagreb, Fonoa has become synonymous with innovation in handling complex tax processes, with Tremac highlighting the key moments that have shaped the company’s development. Fonoa’s core business focuses on automating indirect tax calculation and reporting processes, such as VAT, GST, and Sales tax, particularly in sectors like digital platforms and e-commerce.
“If you open any global app today, there’s a good chance they’re our client,” Tremac emphasized. Fonoa enables platforms like Uber, Netflix, and many others to automatically calculate transaction taxes in real-time, eliminating the need for manual entries or complex procedures. Tremac explained that they concentrate on automating global business transactions, where each transaction is tied to different tax regulations depending on the user’s location, the seller, and the transaction type. “Understanding where the seller is, where the buyer is, and what the tax rate is—these are all challenges our software solves within fractions of a second,” Tremac added.
Global Clients and Presence in 180 Countries
Although Fonoa doesn’t have contracts with clients in Croatia, the company operates globally, covering 180 countries with its software. Some of its largest clients are digital platforms for food delivery, ride-sharing, and streaming, like Uber and Netflix. Tremac highlighted that the sector in which they operate is one of the most complex due to the high level of compliance with diverse regulations.
“There aren’t many global players in our sector, maybe four or five,” Tremac explained, illustrating how Fonoa uses its agility and technological superiority to implement solutions in new markets faster than competitors.
Acquisition of PwC Software as an Entry into the Financial Industry
One of Fonoa’s recent strategic moves was acquiring the software and client base of PwC in the United Kingdom. “It’s not about the entire company but rather the software and clients who use it,” Tremac explained, adding that this acquisition enabled Fonoa to enter the financial sector more quickly, a sector that is typically very closed and requires lengthy sales cycles.
“This was our quick entry into the conservative market of financial institutions, which we hadn’t covered until now,” Tremac noted. This acquisition marked the beginning of Fonoa’s expansion into new verticals, such as financial services, where client customization and strict regulations are essential.
Strategic Growth and Hiring New Experts
Fonoa is experiencing rapid growth, which brings a continuous need to expand its team. Currently employing about 125 people from over 20 countries, Fonoa has four offices—in Zagreb, London, Dublin, and Atlanta. Tremac announced further expansion, with plans to hire an additional 30 people by the end of the year, and this number is expected to grow in the coming years.
“We have excellent people, Croatian engineers are among the best in the company, but there just aren’t enough of them,” said Tremac. Croatia has talented professionals, but the labor market is shallow, making rapid scaling difficult. “For instance, if we want to hire 50 highly specialized people in Zagreb in six months, it’s very challenging. In cities like London or Barcelona, it would be much quicker,” Tremac added. To address this challenge, Fonoa hires international talent and enables remote work for certain positions, but the primary goal remains to retain core operations and development in Zagreb. Expanding the Zagreb office is a current focus, and they are seeking reinforcements .
In addition to technical skills, Tremac emphasizes that finding people with international experience, or those willing and able to adapt to working with global clients, is essential for global success.
Artificial Intelligence as an Accelerator, Not a Threat
In discussing future technology, Tremac mentioned that Fonoa already uses artificial intelligence (AI) to monitor tax regulations and accelerate product development. For Fonoa, AI is an accelerator, not a threat, Tremac said, adding that technology has helped speed up data processing, though ensuring AI’s output accuracy remains challenging.
However, he also warned of potential negative consequences of AI for young engineers just entering the job market, as companies increasingly prefer experienced individuals due to the accelerated development of AI.
If you’re interested in learning more about how Fonoa’s team automates complex tax processes and captures the global market, watch the fifth episode SoMoCast.
