Biodit, the Bulgarian startup, which develops and produces access control systems based on biometric identification, is soon to announce the date for its IPO on the Bulgarian Stock Exchange’s BEAM market. The company will offer 1 million ordinary dematerialized shares at a price of BGN1 each, as this is the first tranche of the company’s offering of 1.95M shares. As noted by Investor.bg, Biodit’s plans are to use 95% of the money from the offering for its sales and marketing campaigns. The date and the other details around the deal are to be announced on December 21.
A happy ending after a series of legal issues
The IPO of Biodit was scheduled for the end of 2018, and the company closed a pre-IPO round of €250K in September this year, led by local fund Impetus Capital. Biodit also attracted a €200K commitment from Impetus and €1.5M from NEVEQ, yet, in 2019, after 5 months of silence, the Financial Supervision Commission rejected the IPO prospectus for the startup without publicly disclosing the reasons. As officially stated by Julian Sofroniev, the CEO of the company, the commission did not recognize the company’s depreciation policy for a fixed asset depreciation that is consistent with the international standards. While this cost the company more than half a year delay, it also brought about the idea for raising venture capital.
Access to capital for SMEs
The BEAM market was initially set up to allow small and medium-sized enterprises to go public under simplified procedures as compared to the regulated market. The tool was aimed at small and medium-sized enterprises and can facilitate an IPO or admission to trading without fundraising. Since the beginning of the program, it was known that Biodit would be the first company to initiate its IPO through the BEAM market. “The Bulgarian startup market is still not well developed and raising capital is quite hard. The BEAM market creates a long-term perspective for SMEs to scale. From an administrative point of view, the fundraising process is extremely complex and the simplified procedures of the BEAM market are a relief. What is more, with the latest legislative changes, the maximum capital raised through the BEAM market can reach €3M,” says Julian Sofroniev. He adds that the new market will increase the total startup capital circulating in the Bulgarian ecosystem and will provide individual investors with the opportunity to invest more easily
The plans for the future
Earlier this year, Biodit announced its plans to offer 1.95 million shares on the Bulgarian stock exchange in several tranches. According to a citation of an official company statement made by Investor.bg, the IPO will be considered successful if at least 250,000 shares are subscribed for and paid for. The IPO of Biodit will be happening in the second or third week of January, Sofroniev shares in front of Trending Topics SEE. As noted by the CEO of the company, Biodit’s plans include further expansion in the Bulgarian market, more specifically to the hospitality segment, to which it plans to introduce its biometric solutions for hotel chains and office buildings.
For this purpose, the company has undergone a change in its shareholder structure as Sofroniev acquired a total of 8 percent of the shares of the venture capital fund NEVEQ, thus attracting a strategic investor with valuable connections in the hospitality industry, Sofroniev shares. The next step for Biodit will be to expand abroad. Although the current situation with the pandemic has affected the company clients, the plan is that Biodit will expand to Spain around the middle of 2021. The company will also be releasing a second offering to the market in the next 12-18 months, which is expected to be bigger than the one we will soon see.