Aiming to create a resilient, inclusive, and future-proof business environment, the Fund Manager of Financial Instruments in Bulgaria (FMFIB) will manage around €650M (1.26B BGN) under the Programme for Competitiveness and Innovations in Enterprises 2021 – 2027 to ensure the effective, transparent, and fair distribution of European, national, and private financial resources across various sectors. The public resource will mobilize additional private capital available for targeted investments.
FMFIB provides the economy access to alternative financing through financial instruments co-financed by the EU shared management funds. Those funds are respectively used to enhance business competitiveness, economic growth, and sustainability practices on a national level. The overall objective is to deliver local impact through a multi-sector platform and a broad product offering.
FMFIB’s past achievements rooted in its active market approach and robust partnership network
Given the ambitious goals of the entire team of FMFIB, it comes as no surprise that 2023 is a dynamic and pivotal year for the Fund, as the latter is simultaneously concluding the successful implementation of the 2014-2020 operational programs and the engineering of the upcoming financial instruments. Pavel Lisev, Executive Director and Management Board Member at FMFIB, shares that the challenging task of ensuring the continuity of the support should be carried out, regardless of the economic situation that is witnessed globally.
To fulfill this objective, as Pavel explains, both high-level strategic thinking, a prudential approach, and a cross-functional network of financial intermediaries (selected via transparent procurement procedures) are highly required.
Moreover, when it comes to equity investments, the selected fund managers provide guidance to the investees, through a dedicated mentorship to help startups grow at an international scale. FMFIB’s current venture capital funds are Innovation Capital, Vitosha Venture Partners, New Vision 3, Morningside Hill, and Silverline Capital. They actively provide financial support to innovative startups and have already invested in companies like Econic One (an e-mobility leader), Nasekomo (a pioneer in insect rearing in the region), Alcatraz AI (a company that raised $25M to answer authentication needs globally), MYX AD (a digital twin-focused company that raised €3.5M to develop the telecom sector), Phos (a fintech leader acquired by Ingenico), and many others, that are able to become tech leaders internationally.
At this stage, FMFIB has successfully supported over 2,300 projects (Bulgarian SMEs) and 220 equity investments (start-ups), greatly promoting employment and economic development. A lot of the investments were completed during periods of crisis and economic downturn, such as the one caused by the COVID-19 pandemic.
FMFIB’s mission to ensure continuity, boost regional development, and help businesses grow
FMFIB will add to its current offerings new debt and equity financial instruments in the form of funded risk sharing and guarantees to enable the implementation of eligible projects and in the form of equity and quasi-equity investments to support different stages of the business’s lifecycle (from initial idea to maturity). During the 2021 – 2027 programming period, a combination of financial instruments and grants in one operation is envisaged. Grants can play a significant role in stimulating investment activity, especially in riskier projects or undertakings with lower returns.
Upcoming equity financial instruments will focus on Entrepreneurship (currently in development), Digitalization and Innovation. In addition, one should also look forward to a technology transfer fund with an expected budget of €60M under the Research, Innovation and Digitalisation for Smart Transformation Operational Programme which will promote interaction between businesses and science.
Furthermore, Pavel emphasizes that another priority in the new programming period 2021-2027 will be the support for the implementation of circular economy projects, namely in the field of energy and resource efficiency. The social component in our products also promotes sustainable growth at a local level, therefore small and medium-sized enterprises in less developed regions should also be encouraged to seek financing. In fact, after working in leading financial institutions and leveraging the accumulated expertise by joining a public organization supporting local business development, Pavel is pleased to announce that above 50% of the allocated resources should be invested in less developed regions, to achieve fair distribution outside the major economic centers of Bulgaria – Sofia and outside the southwest region. Other high-social value sectors that the Fund is envisaged to support include regional development, technology transfer, education, fisheries, and rural development.
One of the most important initiatives for the development of youth entrepreneurship in Bulgaria is the mentorship programs, which are an effective way to support young people with innovative ideas facing difficulties in realizing them. Future entrepreneurs can receive valuable advice and guidance from experienced professionals who have already gone through the same challenges and know how to overcome them. FMFIB greatly contributes to such initiatives – “last week we announced the start of the 6-week mentorship program, part of the second edition of our national competition “Best Youth Startup in Bulgaria 2023”, which we organize together with the Faculty of Economics and Business Administration within the Sofia University “St. Kliment Ohridski”. It is a privilege that FMFIB can motivate and actively stimulate young people to realize their ideas from initiation to execution, thus creating a pipeline of innovative projects. Overall, investment in young people is a key step towards innovation and sustainable economic development in the country.”
FMFIB: 2023-2029 and beyond
While still conducting market tests for the upcoming programming period – concept creation, implementation of internal know-how, and best practices from other Member States – the Fund remains committed to supporting Bulgarian businesses in scaling up their operations and ensuring the sustainability of fund management by applying corporate practices of proven efficiency.
So, if you have a business idea, but lack the resources to develop it, you can turn to the Fund`s existing and prospective financial intermediaries. As Pavel Lisev concludes, the Fund’s primary role is to support the Bulgarian startup ecosystem, to enhance impact investments, increase enterprise capacity to innovate, and to generate sustainable growth.