"The investment horizon of five of the seven most active investment funds in Bulgaria expired on December 31 last year; they were financed by the country's Fund of Funds. Therefore, finding funding for Bulgarian startups might be a bit difficult, at least this year," Hadjiev told SeeNews in a recent interview. To address the expected issue, SeedBlink plans to bolster its suite of lesser-known products and services while awaiting regulatory changes that will stimulate their use.
As an equity management platform, SeedBlink helps startups throughout their lifecycle, from structuring capital to fundraising, reporting and issuing stock options. With Bulgaria's introduction of the variable capital company (VCC) last year and its expected introduction in commercial law at the end of June, SeedBlink sees a growing demand for such services.
In 2023, the company launched Nimity, a solution designed to simplify equity management processes for entrepreneurs and private investors across Europe. Nimity streamlines tasks such as cap table tracking, investor governance, employee stock ownership plans (ESOP) automation and fundraising.
SeedBlink has invested significantly in Nimity over the past year, recognising a gap in the European market, with most competitors focusing on the UK or the U.S., Hadjiev added. He believes Nimity will be especially useful in Bulgaria in 2024, underlining the importance of preparing startups for financing challenges, incentivising staff and making them a part of the startup's vision through equity participation.
In terms of the investment volume, SeedBlink mobilised about 200 million euro ($215.2 million) in total last year, with Bulgaria contributing 14%, while Romania and Greece made up 34% and 1%, respectively. SeedBlink's investors accounted for 7% of mobilised investments in Bulgaria in 2023 and held shares of 6% and 12% of investments mobilised in Romania and Greece, respectively. While the platform received applications for funding from over 1,800 Southeast European companies, it only financed 3%, demonstrating its selective approach.
SeedBlink's acquisition of Netherlands-based investment crowdfunding platform Symbid in 2022 facilitated its expansion into the Benelux market, where it currently employs three people. The company ventured into the DACH region (Germany, Austria and Switzerland) in June 2023 and said last month that it plans to expand its operational presence there, as well as in Benelux and France. The platform is also looking at other countries in Southeast Europe.
"Last year especially, our funds had sporadic successes in neighbouring Serbia and Albania. I do not expect dozens of deals per year, but if there are two or three interesting ones, we would be happy to look at those. So we definitely want to be in Albania, Serbia and North Macedonia," Hadjiev said.
However, educating Southeast European investors about alternative investment forms remains a key challenge for the company.
"In Bulgaria, the first thing you do when you earn some money is to buy real estate and this is the investment that has been instilled in us over the years, that it is the safest investment. I am not arguing with that perception. We do equity and risk financing. There is a risk, of course, that you might lose your entire investment because, statistically speaking, eight out of ten companies in your portfolio will most likely not survive more than three years," Hadjiev noted.
Investors on the SeedBlink platform typically diversify their portfolios across 10 to 15 companies, focusing on local startups at first, before gradually expanding to include opportunities across Europe as they gain experience. While the investment landscape in the Balkans, particularly Greece, remains insular, Hadjiev sees signs of increased international collaboration.
"I hope and see that there is a tendency for this to change, and this is an indication of the level of growth of an ecosystem. The more international deals you do, the more comfortable you are with the risk you have taken, because the risk is not so much based on where you are positioned as a startup, but the potential of your idea," Hadjiev noted.
