Have you ever wondered how the startup ecosystem looks in South Eastern Europe? Belizar Marinov, Manager of Investment Projects at Eleven, an accelerator and venture capital fund based in Sofia, Bulgaria, gives a simple answer: “There are a lot of promising entrepreneurs.” Promising entrepreneurs? What does it actually mean? To answer that question, let’s look at some Eleven’s statistics:
To find out more about startups from South Eastern Europe, I have asked Belizar Marinov some more questions about Eleven’s work in the region.
How would you briefly describe the startup ecosystem in Bulgaria?
The startup ecosystem has been developing very quickly in the past few years. There were a few organisations which started all events and gatherings. With the help of young entrepreneurs and the introduction of funds of Eleven and others, the startup ecosystem saw a really big push and development.
Currently, Sofia is a very active startup place and it attracts entrepreneurs from all across Eastern Europe. There are many regular events and a number of organisations and NGOs that work actively in the field. We see that corporate sponsors support the ecosystem on a regular basis. We also have a few coworking spaces which gather startups and are venues for many events.
What inspired to launch Eleven?
Eleven was launched because we had belief that there are a lot of promising entrepreneurs in South Eastern Europe who can really benefit from having financial support, our accelerator programme and mentor network. Many of our founders are first time entrepreneurs and we really believe that we provide not only money but also support which is relevant for this startup stage.
In what ways has Eleven helped to improve networking conditions for Bulgarian startups?
The network that we create at Eleven is at the centre of what we do. We have a network of 250 mentors who participate in our mentoring sessions on a regular basis. Also, as an investor, we act as a connector between our startups and many contacts in relevant industries both here in Bulgaria and abroad.
In addition to that, the founders themselves are a big network. There are over 300 founders, 150 startups and 20 different nationalities. We also regularly organise business trips abroad, which help our startups to meet relevant contacts.
What local startup activities and events do you support? What are your own initiatives?
As an active part in the Bulgarian ecosystem, we support a lot of events such as Startup Weekend or other type of startup competitions. There is an initiative called Pre-accelerator, which is run by one of the entrepreneurship NGOs here. We support them by giving mentorship and fast access for their alumni to our selection process. Once in a while, we host events in our coworking space and provide meeting space for some organisations in our office. We are ready to help whenever there is a need.
What are the biggest challenges that Bulgarian startups face? How do you support them?
The challenges could be related to the small market of Bulgaria. We see our role in helping startups to accelerate and become international. The local market is not big enough to grow a prosperous technology startup so our support is needed.
In 2012 the European Commission (EC) and the European Investment Bank (EIF) provided Eleven the Entrepreneurship Acceleration and Seed Financing Instrument, worth EUR 12 million, under the Joint European Resources for Micro to Medium Enterprises (JEREMIE) Holding Fund. What results have you achieved? What are your expectations for the future?
Currently, we are working on a 10-year mandate. This is a standard mandate for an early-stage venture fund like ours, meaning that during the first few years we are investing those EUR 12 million in about 100-110 projects. During the later years, we are going to manage their portfolios. Up to now, we have made nearly 110 investments. In May we are going to accept the 9th class of startups into our coworking space. This will be the last class for this EUR 12 million fund so in the future we are planning to raise another fund which will support and continue our work beyond 2015.
Our biggest achievement is a community that we have created by supporting over 100 companies. Half of them are Bulgarian teams, half of them are international teams. 2-3 years from now we expect to see some first big exits. We have not made a big exit so far since our first investments are just 3 years old.
What kind of support does the local startup ecosystem receive from the public and private sector?
There is no doubt that the equity instruments that have been created through the JEREMIE Holding Fund are the most notable public initiative. Apart from Eleven and our colleagues from LAUNCHub, there are a few other funds which target at investments in more advanced projects. These are instruments between EUR 50–100 million that are available to entrepreneurs. Some of them are entirely public money like ours, some of them are a mixture of public and private money.
In terms of private support for entrepreneurs, there is a number of tech companies that actively support events in the local ecosystem. These are some international companies like Microsoft and some Bulgarian technology companies like Telerik. Many of them also provide a lot of free services for our startups on a centralised level. For example, F6S.com connects accelerators across the world. All member accelerators have access to a lot of free perks and services for their companies such as hosting and cloud infrastructure. It could amount to USD 200 000 per year. Each year one of our startups can benefit from it.
You operate not only in Bulgaria but also in the region of South Eastern Europe. Does your work in the neighbouring countries differ anyhow significantly from your local activities?
Our office and coworking space are based in Sofia but we are very active in the neighbouring countries too. We don’t have permanent team members there but we travel a lot and organise local meetups. We make some selection in Slovenia, Croatia, Serbia, etc. We organise many activities there with some local founders. They act as ambassadors to Eleven: they help and represent us in the local ecosystems and refer a lot of projects to us when it comes to selecting projects for investment.
Could you share any success story of a startup which took part in your accelerator programme?
We have a number of interesting stories. For example, we have one startup that works on software for human resource management. They use algorithms to process a lot of resumes. Their software tries to make a fit based on some job criteria and culture. This is something that is really recognised as being useful to HR professionals. They have received over USD 500 000 of funding, moved their office to New York and actively work with big clients. The company is called Match.io.
We have another interesting story of 2 founders. One of them was very young: he was only 16-year-old when we first invested in the company. The other founder was a serial entrepreneur. They created a company called Emailio, which aims to create a new mobile e-mail app. They got accepted to Y Combinator, a famous accelerator, received its funding and now are based in Silicon Valley. From over 100 companies it has supported in 10 years, the company is the first from Bulgaria and with the youngest founder ever.
How does the membership in the Global Accelerator Network (GAN) benefit Eleven?
Being a member of the Global Accelerator Network is very important and beneficial for us. It provides an opportunity to exchange the best practices and organise some events together with accelerators all across the world. This is very helpful because our industry is developing very quick: what was the best practice one year ago now is outdated. That’s why we want to stay on the [cutting – ed. note] edge of what is going on in our industry and to have a network which supports us in what we do and which we could extend to our founders.
Thank you for the interview.
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