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  • NV3 Team

Bulgarian VC Landscape: Analyzing Fund of Funds Investments and NV3's Success Story

As published in Capital Media on 05 April 2024






In summary

Five funds invested nearly BGN 300 million from the Fund of Funds (FNF) into 360 companies, with varying degrees of challenges amid external factors like the COVID-19 pandemic and inflation. 

Despite hurdles such as delays in investment launches and restructuring within the Fund of Funds, the outcome of the initial state-allocated funds for equity investments appears positive. 


The investment period ended on December 31, 2023, totaling BGN 296 million invested, with BGN 212 million from public funds. While most companies received smaller amounts of support, larger transactions from Silverline Capital contributed to the financial pool, focusing on lower-risk, developed companies. 

Reflecting on the program's success, fund representatives acknowledge initial difficulties but commend the growth of professional administration despite political disruptions.


NV3’s performance

NV3 stands out as NEVEQ's third fund allocated BGN 49 million across 39 companies, securing one successful exit with the acquisition of fintech Phos by French company Ingenico. While technology firms dominate NV3's portfolio, it also includes promising ventures in sectors like health food, and fashion. 


"We were able to do the deals we needed and wanted. However, we had a relatively lighter mandate than Vitosha and Innovation Capital. On average, we found 5-7 companies per year, which is tolerable, but still around the ceiling for how many investments you can manage effectively," says Alexander Terziyski, partner at NV3.


NV3 is the only fund of the first batch that did not fully exhaust its investment commitment within the active season. The team still has about BGN 5 million to invest in portfolio companies that are performing great. NV3 maintains a strategic approach, focusing resources on top-performing companies this approach ensures sustained support for proven ventures while allowing for prudent exits from underperforming investments.


"It makes no sense to support companies in an early phase that have not proven your investment hypothesis. This is part of the game," says Yordan Zarev, a partner in the fund. 


Currently, the big standout in the fund's portfolio is the telecoms digital twins startup,  MYX, whose revenues have grown a hundredfold in two years, to over BGN 15 million in 2023. MYX is the fastest growing company in Bulgaria in 2022 according to the "Gepard" ranking of "Capital", with a growth of over 4200%.




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