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Bulgaria’s Fund of Funds Unveils New Financial Instrument to Boost Bulgarian SMEs with €100M

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Only have 1 minute? Here are the 3 key takeaways:

  • The Fund Manager of Financial Instruments in Bulgaria (FMFIB) is looking for financial intermediaries for a new “Entrepreneurship Fund”, backed with €100M public resource.
  • The new fund is financed under the EU Programme for Competitiveness and Innovations in Enterprises and co-financed by the European Regional Development Fund.
  • The “Entrepreneurship Fund” will be structured as 3 separate funds looking to support SMEs from early stage to growth.


FMFIB provides access to alternative financing for the Bulgarian economy through financial instruments co-financed by the EU shared management funds. The FMFIB manages around €650M in total under the Programme for Competitiveness and Innovations in Enterprises for the period 2021- 2027.

Now, FMFIB has started its first procedure under the “Competitiveness and Innovations in Enterprises” Program 2021-2027 (PKIP), co-financed by the European Regional Development Fund.

In 2024 the Fund of Funds will select financial intermediaries for the management of a financial instrument, called “Entrepreneurship Fund”.

The “Entrepreneurship Fund” requires a combination of public and private funding. The public resource provided is €100M, but the total amount is expected to reach €126M through the additional co-financing by private investors.

The new financial instrument will be structured as 3 separate funds:

  • Early Stage Fund – €30M public rеsourcе dеsignеd to provide support to startups at еarly stagе of dеvеlopmеnt (proof of concept) with tickеts up to €1M;
  • Venture capital fund – €30M public rеsourcе focused on fast-growing businesses or companies that have developed their product and aim to launch mass production and/or distribution to target markets with tickеts up to €3M;
  • Growth Fund – €40M public rеsourcе for investments in mature and fast-growing enterprises with tickets up to €4M;

Konstantina Voynova, Head of Equity Financial Instruments at FMFIB explained for The Recursive that the procedure for choosing fund managers involves several stages (initial offers, negotiations, final offers) and typically lasts for about 12 months. This means the new fund managers will be announced by the end of 2024 or the beginning of 2025.  

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When choosing fund managers, the FMFIB team will look for experience in equity investments and proof of supporting enterprises at different stages of development. Also, they aim for continuity with existing PE and VC funds that participated in the previous EU program 2014-2020. 

The 5 equity funds under OPIC 2014-2020 are Innovation Capital, Vitosha Venture Partners, New Vision 3, Morningside Hill, and Silverline Capital.

Some of them shared with The Recursive a few months ago that they are interested in participating in procedures for the next investment cycle.

FMFIB’s Key Priorities

After launching the procedure for the Entrepreneurship Funds, the FMFIB team will focus their efforts on the structuring of the Technology transfer fund (with an expected budget of €60M), which will be the first ever for Bulgaria.

In the pipeline is another startup fund under the Innovation pillar of the EU Competitiveness program, as well as two other funds – one for Digitalization and one for Industry 4.0.

“Our priorities remain the same as all our efforts are directed towards efficiently allocating resources, leveraging them through the involvement of additional private capital, and effectively implementing various financial instruments. This includes addressing key challenges through initiatives for legislative changes aimed at optimizing the overall environment and the execution and management processes of financial instruments”, Konstantina Voynova commented for The Recursive.

Tracking the evolution of Bulgarian SMEs

In the previous investment cycle, FMFIB has successfully supported over 2,300 projects (Bulgarian SMEs) and 220 equity investments (startups).

According to Konstantina Voynova from the FMFIB team during this period: “Bulgaria has ascended to a prominent position as a leading investor hub within the SEE startup ecosystem, showing remarkable growth and maturity over the last few years.”

She tracks this evolution within the surge in funding activities, the larger investment rounds, and increased participation rates and adds that the infusion of public resources has been instrumental in building credibility and stability in the Bulgarian startup ecosystem.

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*Potеntial candidatеs can apply for this procеdurе hеrе until the 20th of February 2024. 

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Zornitsa Stoilova is Editor-in-Chief at The Recursive. She has over 15 years of experience in journalism and the management of editorial teams.