The local ecosystem has been waiting for this moment for quite some time. Around a year after it signed a contract with their major limited partner – the governmental Fund of Funds, the early-stage fund New Vision 3, a successor of one of the first VCs in Bulgaria – NEVEQ, announced its first three investments – all in fintech. The led by Zlatolina Mukova and Konstantin Petrov VC firm puts €2.5M in fintech group Paynetics, and startups Phos and Phyre.
Financial technology, and especially its fastest-growing vertical digital payments, are a focus for New Vision 3 (NV3), explains Petrov in an official statement. Artificial Intelligence, shared economy and blockchain are the other three domains on which the €23M fund puts a priority. In the next four years, NV3 has the mandate to back another 40+ companies in the seed and startup phase.
€5M in total for the three fintech players
The payment solutions group Paynetics and the two startups – the mobile wallet Phyre, and the app that turns smartphones into POS-terminals Phos, are the first three companies that NV3 backs. “The success of every fintech company depends on the quality of its product, the technology, and the motivated and professional team. I believe with these three investments NV3 supports the best players in this market,” comments Konstantin Petrov.
Alongside the €2.5M (€2.2M of which provided by the Fund of Funds) by the new VC, the Bulgarian-American Credit Bank, and international investors provide additional €2.45M of fresh capital, reads an official statement.
Paynetics actually closes a round of €2.45M led by BACB, in which NV3 participated with €1M. Founded in 2005, and led by fintech entrepreneur Valeri Valtchev, Paynetics is an EU licensed e-money issuer and payment service provider offering payments-as-a-service. The company offers a wide range of B2B and B2C payment solutions and operates both in the local, but also in the European market.
NV3 is the lead investor in the rounds of Phyre and Phos. Phyre raises €1.55M and NV3 participates with €500K. The fund leads Phos’s €1.2M round, investing €1M in the company.
Phyre is a digital wallet that features mobile payments, digital loyalty cards, peer-to-peer payments, and allows users to pay contactless via smartphone. The company, which was founded in 2015 by Konstantin Djelebov, Ivo Gueorgiev, and Valeri Valtchev already has over 30K paying customers on the domestic market. Similarly to Revolut, Phyre also offers the opportunity to purchase virtual and physical cards and pay contactless with a smartphone.
Officially started in 2018, Phos offers a technology that aims to help small and mid-sized merchants to easily offer contactless payments to their clients. The company, led by Ivo Gueorguiev, has developed a mobile application for Android devices that turns them into POS terminals and thus eliminates the need for additional hardware products. With the technology, every smartphone could become a POS and ATM, and there’s also a ’cashback’ option. The product designed to address the European market, was launched in the Android appstore at the end of 2019, after going through long security certification processes with major payment operators.
The fresh capital will be used for strengthening market positions (more details coming soon).
These three deals are a strong statement that Zlatolina Mukova and Konstantin Petrov are back on the VC scene. Being pioneers in the Bulgarian and regional VC industry with NEVEQ in 2007, NV3 is their third investment venture. NEVEQ has so far deployed €45M through its first two funds and has four successful exits in its record – Vayant Travel Technologies, FinAnalytica, 3DC, and DealMarket. Unlike the previous activities of NEVEQ related to rather scaling and growth-stage companies, the new fund is targeted explicitly at startup companies.
NV3 has an investment capacity of €23M, €19.1M of which provided by the Fund of Funds under the operational program Competitiveness, and a mandate to invest in 45 Bulgarian companies in growth and early stages in the next four years. The main fields of interest are FinTech, AI, Blockchain Solutions, and Shared Economy.
Although, due to the global coronavirus outbreak, March 2020 marks the beginning of a time of concern for the whole VC industry, fintech seems to be less affected, at least so far. In the past two weeks, already four fintech companies have closed funding rounds. Recently, the expenses management startup Payhawk also announced it had closed a €3M seed round, led by the German VC Earlybird. Of course, it’s hard to make any conclusions based on these deals, as negotiations take longer, and the fact that the announcements come just now, it doesn’t necessarily mean that investments in financial technologies are accelerating and this has anything to do with the expected economic and financial crisis.