The governmental Fund of Funds has officially signed its contract with Vitosha Venture Partners, the third new early-stage investor in Bulgaria. The new VC, that will manage €18.2m of public funding and around €1.2m private capital, is designed to invest in over 100 ventures in the next four years. The fund is already open for business and applications.
“We expect to close the first seed-stage deals in the next two months. Currently, we are in advanced negotiations with 5-6 companies. In Fall, we’ll most probably also kick start the acceleration program, which is currently being designed,” tells us Max Gurvits, one of the partners. Half of the investment capacity of Vitosha Venture Partners is targeted at seed and pre-Series A investments, the other half is for acceleration. The new fund is sector agnostic and the partners plan to invest in a wide range of innovations – from purely tech, to digitally-enabled models, including such in sectors like retail and foodtech, shares the partners.
Although Vitosha Venture Partners is set to invest in Bulgarian legal entities only, the international team and their network suggest that they will be looking at companies from the whole region. Attracting interesting international startups to Bulgaria is also part of the plan, although not the primary focus.
The partners are currently looking at different opportunities for the design of the accelerator together with different stakeholders of the ecosystem such as coworking spaces. “We’ve learned a lot along the way and want to put it into practice now. The acceleration program will also feature components like international experts in residence,” hints Gurvits. He was also part of Eleven Accelerator back in 2013/14 and has been developing an international ‘entrepreneurs in residence’ program ever since in an attempt to import know-how into ecosystems that are earlier in their development. Mentoring and leveraging the international partners is the key selling point of Vitosha Venture Partners, not the financial aspect, adds Gurvits.
The recent COVID-19 related events have slowed down the processes, but haven’t negatively impacted Vitosha Venture Partners. Indeed, recently the governmental Fund of Funds, the major limited partners in the fund, has received approval to lower the requirements for private co-financing in deals of up to €800K. This is a crisis measure until the end of 2020. In other words, most of Vitosha’s deals by the end of the year may happen even quicker and more easily.
Who are the partners and who’s in their network
“The structure and the partners of Vitosha Venture Partners are quite established. During the application process, we realized that all together we have more than a €140M in VC transactions and over 40 years of investment experience. We are six partners and with the great team spirit we have already done a number of initiatives together over the last 5 years, paving a strong basis for a good way forward,” told us in an earlier interview Nikola Stojanow, one of the partners, who’s also CEO of the blockchain investment vehicle Aeternity Ventures.
Vitosha Venture Partners features six partners. These are Max Gurvits, Erik Anderson, Paul Weinberger, and Maris Prii. Gurvits is a well-known networker and connector in the Balkan startup ecosystem, and former advisor at the investment fund Eleven. The Estonian partner Maris Prii brings along experience as Chief Operation Officer at the incubator Startups Wise Guys and was also a member of the Estonian Startup Visa committee to the Ministry of Interior, where she reviewed applications for the program. Erik Anderson is currently Venture Partner at the Estonian Tera Ventures and is active mostly in the US. Paul Weinberger is an independent VC and M&A specialist with a track record of several successful exits and a total transaction volume of over €120m. One of the new partners – Marin Iliev, has served as an investment manager in venture fund NEVEQ in 2007-2012 and private fund Rosslyn Capital earlier, as his LinkedIn profile shows. Nikola Stojanow, the CEO of blockchain investment company Aeternity Ventures is the sixth partner.
Here’s everything else you need to know
|Public/Private capital||90% public from European Operational Program Innovation and Competitiveness, managed through Fund of Funds|
10% private, where 3% managers own capital and 7% LPs and funds, some in the form of co-investments and not a direct investment in the fund
|Type of investment||7-20% equity|
|Number of potential investments||116|
29 annually (11 of which in the early stage component of up to €50k)
|Тerm||4 years investment period|
|Focus||Technology, digitally-enabled businesses, sector agnostic|
|Partners and expertise||Nikola Stojanow, the fintech and blockchain expert – CEO of blockchain investment company Aeternity Ventures|
|Marin Iliev, the growth channels expert – an investment manager in venture fund NEVEQ in 2007-2012, and private fund Rosslyn Capital earlier|
|Max Gurvits, the Silicon Valley <> Eastern Europe connector – networker, entrepreneurs, startup programs initiator, and former advisor at the investment fund Eleven Ventures|
|Maris Prii, the Nordic market connection – former Chief Operation Officer at the Estonian incubator Startups Wise Guys and was also a member of the Estonian Startup Visa committee to the Ministry of Interior, where she reviewed applications for the program|
|Erik Anderson, the US market connection – Venture Partner at the Estonian Tera Ventures and active mostly in the US|
|Paul Weinberger, European markets connection – independent VC and M&A specialist with a track record of several successful exits and a total transaction volume of over €120m; from investor and chairman to operational day-to-day management, he has held and holds leading positions in various tech companies in Europe.|
Level completed: The new network of early-stage VCs is here
This is the third and last contract with an early-stage investment manager the Fund of Funds had to sign. The first two – New Vision 3 (from the partners of NEVEQ I and II) and Innovation Accelerator Bulgaria (it has undergone some structural changes and has a new name -Innovation Capital, details soon), have already signed their contracts last year. NV3 has already closed its first four deals.
With this contract, the Fund of Funds is almost done with building the next VC layer for the local ecosystem. There’s also one chosen fund manager in the VC and growth stage – Morningside Hill. A mezzanine fund is also on its way soon. The currently chosen four funds have the mandate to deploy a bit over €97M (190M BGN), €76M of which are public resources, to nearly 400 companies.
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