{"id":7905,"date":"2021-04-05T14:07:05","date_gmt":"2021-04-05T14:07:05","guid":{"rendered":"https:\/\/bvca.bg\/romanian-bulgarian-venture-comparison-report-2020\/"},"modified":"2021-04-05T14:10:57","modified_gmt":"2021-04-05T14:10:57","slug":"romanian-bulgarian-venture-comparison-report-2020","status":"publish","type":"post","link":"https:\/\/bvca.bg\/en\/romanian-bulgarian-venture-comparison-report-2020\/","title":{"rendered":"Romanian \u2013 Bulgarian Venture Comparison Report 2020"},"content":{"rendered":"\t\t
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Blog<\/span><\/h1><\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Romanian \u2013 Bulgarian Venture Comparison Report 2020 <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Two months ago, we published a short status of the venture capital and startup market in Romania. This opened the doors for vivid discussions among the entrepreneurial community in Southern Europe.<\/p>\n

For this analysis, we put together some of the numbers for the Romanian Venture Report 2020<\/a> and teamed up with BVCA \u2013 Bulgarian Private Equity and Venture Capital Association <\/a>\u2013 that gathers and regularly updates<\/a> data on Bulgarian investment activity, provided by GPs and LPs.<\/p>\n

The full dataset of information can be consulted by the end of the article.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Overview of Romanian & Bulgarian VC funding landscape<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Despite the pandemic triggered by Covid-19, it seems that not only Romania experienced thriving growth, but its neighbor Bulgaria, too. And there are a few common traits and differences to take into account when comparing these two countries.<\/p>\n

Both countries indicate the same total number of 59 transactions that took place in 2020<\/strong>. While Romania is counting 59 VC transactions, Bulgaria\u2019s statistics also include the business angels\u2019 activity. Hence, for 2020 BVCA reports 56 investments by venture capital and private equity funds and additional 3 deals by business angels. If things are not odd enough with the exact same number of deals, the investment numbers in terms of value also come close for 2020, with the total volume of investments in Romania of \u20ac30.4M and Bulgaria at \u20ac29.4M.<\/p>\n

Both countries have a growing trend when it comes to the number of venture investments taking place each year, and the amount of money invested in their local startups.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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The Bulgarian VC ecosystem was kick-started in 2012 with the EIF-backed funds under the JEREMIE program, considered a pioneer in the region. Since then, the number of locally-based funds has been steadily increasing, and they now cover the full spectrum of what the new, gig-economy-focused companies need. There are active accelerators, venture capital, growth equity, and mezzanine funds.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\u201cThere is now a healthy mix of funds targeting Bulgaria-based firms and managers that are going after regional opportunities. As a result, the capital of Bulgaria, Sofia, was selected as one of the 10 top cities in the world to launch your startup, by Forbes<\/a>. In the early 2010\u2019s we experienced a boom in newly established tech startups, which was followed by a period of slowdown. Now we are witnessing a new acceleration of activity, this time more mature and sustained, with a lot of local investment and deep tech know-how.\u201d<\/em><\/p>\n

says Evgeny Angelov<\/a>, Chairman at BVCA Association.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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In addition, the second and third-generation funds<\/strong> have successfully closed their fundraising rounds<\/strong>, while their fund managers continue to operate regionally rather than locally, and attract more capital from private sources.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\u201cAlthough in 2020 the newly launched funds were still preparing to start operations or had just started their investment activity, while the rest of the GPs were actively fundraising, there were approximately 60 deals, with more than \u20ac29m invested. There were also four exits by our members \u2013 two by venture capital funds (VCs) and two by private equity funds (PEs), with returns for the GPs in the range of \u20ac1-5m and \u20ac5-10m <\/em>respectively\u201d<\/p>\n

comments Maria Marinova<\/a>, Executive Director at the BVCA Association.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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While Bulgaria is seeing an increase in VC and PE funds, Romania is still under the effect of the UiPath<\/strong> funding rounds that seem to have energized the ecosystem. The Romanian Venture Report 2020 contains a snapshot of the past three years in terms of venture investments. So, this does not include the data for UiPath, because it would have counted 12x the value raised by the other local startups.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\u201cWhile 2020 was quite unpredictable. However, the venture investment pace did not slow down at all. After a short hiatus in March \/ April, it was clear that the pandemic time will be more of a digital acceleration force for both countries. So, I think this is the main reason why venture funds and angel investors kept providing capital to their startups,\u201d<\/em><\/p>\n

says Bogdan Iordache<\/a>, author of the Romanian Venture Report 2020.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Bulgarian capital + Romanian startups = love<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The VC ecosystems of these two countries<\/strong> have a strong<\/strong> collaboration<\/strong>, as well as co-investments that happened in the past years. There is a growing sentiment and perception that the path to success goes through regional cooperation and coordination. Now, let\u2019s take a look specifically at some of these collaborations between<\/strong> Bulgarian and Romanian funds<\/strong> and startups.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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LAUNCHub Ventures<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A CEE-focused VC fund<\/a> based in Bulgaria has made a recent co-investment with Romanian VCs into FintechOS, a thriving fintech startup working on transforming the financial industry through automation. FintechOS raised a Series A of 12.7 EUR at the end of 2019. This round was led by Earlybird VC and OTB Ventures, following a co-investment between LAUCNHub Ventures and two Romanian funds, Gapminder VC and Gecad Ventures.<\/p>\n

In addition, LAUNCHub Ventures has invested in companies expanding their operations to Romania. Examples include the Bulgarian companies HelloHungry (delivery service-based startup that got acquired by Takeaway.com) and Ucha.se (an e-learning platform) who are now operating on the Romanian market.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Eleven Ventures<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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SuperOkay<\/strong>, a UK-based startup with Romanian founders, is one of their first investments<\/a> in a Romanian team. The round was led together with RocaX, a VC fund from Romania, and several UK-based business angels.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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\u201cThis is our first investment<\/a> in a Romanian team in a number of years and we are excited to support a new wave of aspiring founders from Romania building disruptive ventures.\u201d <\/em><\/p>\n

Says Vassil Terziev<\/a>, Managing Partner at Eleven Ventures.<\/p>\n

After the first investment round in the Romanian market, Eleven Ventures targeted other startups that are on a growth curve. One of them is the expansion of Boleron, an insurance platform that closed a 500K EUR round<\/a> and is looking to open its doors in Romania. The investment was made together with another Bulgaria-based VC \u2013 New Vision 3.<\/p>\n

Additionally, in Eleven Ventures\u2019 portfolio are the agritech company Ondo<\/strong>, who are recently announcing their first demo in Romania, EconicOne<\/strong> \u2013 an electric bike manufacturer with a strong presence on the Romanian market in terms of sales, and PayByFace<\/a>, a Romanian fintech company from the VISA innovation program<\/a>, who started a pilot program with Raiffeisen Bank in Bulgaria.<\/p>\n

Early signs of <\/strong>Bulgarian capital supporting Romanian startups<\/b> started to appear 5+ years ago when ShareYourCart & KeenSkim got their initial investment rounds.\u00a0<\/p>\n

ShareYourCart<\/a> is the developer of a social platform button that offers discounts in return for social sharing. The company\u2019s focus is on making and sharing products for buyers and for their friends. ShareYourCart has raised a total of \u20ac50K in funding over 2 rounds. Their latest funding was raised on May 1, 2013, from a Seed round.<\/p>\n

KeenSkim<\/a> \u2014 an online service platform that addresses information overload by creating automatic summaries for news and articles was founded in 2010. The startup raised \u20ac25,000 from a Seed round from Eleven Ventures.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Romanian capital + Bulgarian startups = 404<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Surprisingly, while Bulgarian and Romanian had a couple of cross-border transactions and Bulgarian VC funds became more active in Romania, we see close to zero transactions going from Romania<\/strong> to our neighbors, and only a few baby steps in that direction. Catalyst Romania is the only VC fund that showed interest in possible investments in Bulgarian startups<\/a>.<\/p>\n

\u201cWe had startups from Bulgaria pitching at Tech Angels, but despite the fact that the discussions were pretty advanced \u2014 they didn\u2019t seal the deal. The few investments that came from Bulgaria are more from VC funds, and less from individual investors. And I think for the moment, business angels are looking more into their local startups than expanding to other areas.<\/em><\/p>\n

Now if we look the other way around, I think that Bulgarian VC funds started way earlier than ours, so they have more freedom to take a look at what\u2019s going on in our country. And one more thing \u2014 I think there are more Romanian startups rather than in Bulgaria \u2014 so they have extra possible options to invest if they look in Romania.\u201d<\/em><\/p>\n

I<\/em>s adding Malin-Iulian Stefanescu<\/a>, President at Tech Angels.<\/p>\n

Because we needed to dig deeper to understand why the Romanian local landscape didn\u2019t make any move on Bulgaria. So, we talked with two investors from the local Romanian VC funds, that shared with us a couple of insights:<\/p>\n