BlackPeak Capital, a private equity investment fund with a focus on SEE, completed a €68.5 million first closing of its €120 million target within the BlackPeak Southeast Europe Growth Equity Fund. The SEE fund will channel growth equity investments of €5-10 million in startups and SMEs from Romania, Bulgaria, Serbia, Slovenia, and Croatia. This follows the company’s success with BlackPeak Fund I, which invested in global innovation leaders such as Bulpros, Software Group, and Excitel.
“The Fund provides investors with an opportunity to tap into a largely underserved market where demand for growth equity far outstrips available supply”, Niklas Pichler, Managing Partner of BlackPeak Capital remarked in the press release. To this point, the growth capital and private equity markets have been underserved in the region. Yet, SEE’ combined €420 billion GDP is dominated by SMEs awaiting opportunities to scale.
BlackPeak Capital has long been committed to making a significant positive impact in the region. It was built in 2014 under Rossen Ivanov, Ivailo Gospodinov, Kiril Ivanov, and Angel Stefanov, and later on expanded with Niklas Pichler, joining as Managing Partner, and Dorian Macovei, as Managing Director. Its offices are spread across Sofia, Vienna, Bucharest, and Ljubljana. The BlackPeak Southeast Europe Growth Equity Fund aims to be a major milestone both for the company and the regional private equity ecosystem.
Companies with proven historical growth wanted
The fund targets regional companies with established business models, a history of double-digit growth, and the potential to accelerate, or sustain growth organically or with add-on acquisitions. While it is generally industry-agnostic, there is a strong preference for startups in IT, niche manufacturing, consumer goods, business services, and healthcare.
“We are generally looking for companies with revenues of above EUR 2-3mn and proven historical growth or potential to grow at 20% or more per annum,” Rossen Ivanov told The Recursive.
BlackPeak Capital sees a lot of potential in the market: “Southeast Europe is already home to entrepreneurs who have built global or European leaders in specific niches and we are very excited about the opportunity to be able to partner with some of them and help them grow (…),” Rossen Ivanov and Ivailo Gospodinov, Managing Partners, said, quoted in the press release.
The fund already has some successful investments in its portfolio. One example is Bulpros, the largest Bulgarian software company and one of the fastest-growing tech organizations. Just recently, the company merged with German ec4u, becoming the majority property of the European fund Silverfleet Capital. The combined platform now has more than 1,400 employees and 25 offices across 11 countries.
Another gem in BlackPeak Capital’s portfolio, Software Group was the first in Bulgaria to secure a venture debt, backed by the European Fund for Strategic Investments (EFSI) in an €18 million deal. Elsewhere in the world, Excitel aims to compete for the top three positions in the broadband market in India, after launching only six years ago. Excitel managed to activate 25K connections during the first phase of the pandemic.
When it comes to the investment philosophy, the fund is flexible between investing smaller minority stakes and majority ones. However, they prefer to invest in minority stakes that enable founders to keep the majority shares, Mr Ivanov added. In addition, they can provide structured finance solutions such as mezzanine.
The fund is backed by multiple partners, including the European Investment Fund, through the COSME (Competitiveness of Enterprises and Small and Medium Enterprises) and JEREMIE (Joint European Resources for Micro to Medium Enterprises) programs. It also has the support of the ERBD, the IFC, and Invest BG.
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