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SOFIA (Bulgaria), October 25 (SeeNews) - Southeast Europe-focused venture fund manager NEVEQ Capital Partners has an internal rate of return of 10-15%, as so far all of the company's exits have been successful, the fund's co-founder Pavel Ezekiev told SeeNews.
The Sofia-based fund has three exits so far. In March, it sold its equity in FinAnalytica, a provider of market risk analytics in which it acquired a 50% stake for $5 million (3.4 million euro) in 2007. In 2012, NEVEQ exited digital signage systems developer SpinetiX, in which it bought a minority share in 2008, and in 2013, it sold its stake in co-location and managed hosting service provider 3DC which had been in its portfolio for four years.
Half of the companies in which NEVEQ holds a stake are operating at a profit, Ezekiev told SeeNews in a recent interview.
For each investment made, NEVEQ Capital Partners has reviewed some 30-40 projects, as that number has remained unchanged over the years. The fund invests 2 million euro on the average in a company.
Ten years ago NEVEQ Capital Partners set up their first fund, NEVEQ I. The fund, with a purse of 40 million euro, was backed by the European Bank for Reconstruction and Development. The international lender acquired a 20% stake in the fund, as American, Bulgarian and Austrian investors held the remainder.
NEVEQ II, NEVEQ's second fund, was launched in the spring of 2014. It had a starting capital of 20 million euro ($22 million), of which 70% were provided by the European Investment Fund under the JEREMIE initiative, and the remainder were raised by private investors.
The portfolio of NEVEQ II includes technology company Bulpros, biometrics solutions provider Biodit, software development company Bee Smart Technologies, football talents platform Footbal Scout and vending coffee operator Breaktime.
The companies in NEVEQ's portfolio have experienced five-fold growth of their aggregate revenue since 2008, according to its website. Contrary to the other two big Bulgaria-based funds investing in startups - Eleven and Launchub - whose focus is on companies in an initial stage of their development, around 70% of NEVEQ's investments were in companies in a revenue-generating stage.
However, it is not just financial backing that NEVEQ offers companies.
"Apart from the financial help, the fund assists the companies by expanding the composition of their management and key technical units, by new strategic and business partnerships and by offering a fresh look at the companies' internal processes," Ezekiev commented, adding that lack of cooperation is one of the major problems facing Bulgarian startups.
Going forward, Ezekiev said NEVEQ plans to establish a third fund after NEVEQ II's closure. He, however, did not go into details.