Quietly, behind the glare of Berlin, the Bulgarian startup scene is set to become a hub for seed investment and startups in South East Europe and beyond, according to investor and advisor Tobias Stone. Here, he presents a need-to-know guide to some of Sofia’s companies, programmes and funds.
After negotiating a €200m grant from the EU for venture capital activities, Bulgaria has seen an explosion of seed investment and startup activity. Sofia now boasts an incubator, two seed funds, a tech park, and a match-funding facility, with total funds available totalling €40m for early-stage startups. Here’s what you need to know:
LAUNCHub – €9m accelerator fund
LAUNCHub has a €9m fund (partially EU money), and offers investment plus a six- to nine-month acceleration programme for startups. The programme starts with two months intensive development, with mentoring, networking and business strategy advice. They have a partnership with Seedcamp, and just hosted a mini-Seedcamp in Sofia.
Acceleration investment of about €30,000 is available at the outset, in return for eight to 10 per cent equity. After the programme, companies are eligible to apply for a further €200,000 seed investment.
Eleven – €12m accelerator/incubator fund
Working alongside LAUNCHub in the Sofia startup ecosystem is Eleven, which has a €12m fund (also backed by the EU) and an accelerator/incubator programme. It differs from LAUNCHub in offering a programme in its building plus a partnership with Springboard (now part of TechStars), which gives access to international networks of mentors.
Eleven offers a €50,000 early-stage investment combined with a six-month acceleration programme. Companies are then eligible for a second round of up to €150,000.
Sofia Tech Park
A tech park is also in the pipeline, with €50m earmarked for development, though it is still in its early stages.
A new €20m government match-fund for startups
And during the recent Balkan Venture Forum, the Bulgarian government announced a new €20m match-fund facility that will become available to startups later in the year.
The most important ingredient: “fresh, serious” startups
The startups coming out of Sofia are fresh and serious. Check out Kanbanize, who have a clean take on the Kanban management system, and seem to be taking on US company Trello. Launchub just invested in Jumpido, an educational games company whose previous project, Envision, is now used in over 220 schools in Bulgaria, Spain, Cyprus and the US.
Launchhub and Eleven are already attracting startups from around the region, mainly Serbia, Croatia, Macedonia, and of course Bulgaria, but they are both open to applicants from farther afield.
Next steps for Sofia
A requirement of the EU money going into LAUNCHub and Eleven was to have very strong management teams. Consequently the two funds between them have attracted the strongest players in Bulgarian innovation, finance, and startups. As a group, Eleven, LAUNCHub, Balkan Venture Forum and coworking spaces Betahaus Sofia (the Sofia partner to Betahaus Berlin), and Soho have established a dynamic and exciting startup ecosystem in Sofia, which is spreading into South East Europe.
Eleven will do a road trip through Croatia soon, recruiting startups, and people from Sofia are found at most startup conferences and events around South East Europe now, as well as in Berlin and London. They are co-operating and working together well, and connecting into Berlin.
So, in conclusion? Keep an eye on Sofia. The money and expertise there is sure to attract a lot of dynamic talent in future.
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