Startup Journeys: Bulgaria
In collaboration with the EBRD (European Bank for Reconstruction and Development) and with support from the EU under #InvestEU, The Recursive created Startup Journeys: Bulgaria, a five-part documentary that offers an unfiltered glimpse into the country’s innovation ecosystem. All parts of documentary are now available on YouTube!
What should early-stage startups aim for?
In the past, investors were more willing to take risks on ideas without an established customer base or product traction. Today, venture capitalists expect to see early traction and customers before committing to investment. That is why securing funding still remains a major challenge for early-stage entrepreneurs.
Vassil Popovski, VP of Engineering at Alcatraz AI and angel investor explains: “Five or six years ago, VCs were willing to invest in startups with just a great team, idea, and technology, even without an MVP or customers, whereas today, they expect some traction and customers before providing funding…”
Advice for new founders often also revolves around understanding the distinction between cash flow and profit. Maggie Stancheva, a startup advisor, emphasizes, “Just because you have money in the bank doesn’t mean you’re profitable. You need to plan your finances carefully, forecast cash flow, and understand the importance of recurring revenue.”
She advises founders to focus on building sustainable financial foundations and avoid cutting corners on crucial areas such as accounting and legal services, as mistakes in these areas can become costly down the line.
The role of community and networking also emerged as critical elements of success.
As one founder put it, “If you surround yourself with the right people — the warriors — it’s much easier to grow your vision.” 👉 Watch the rest in episode 1!
Value of strategic advice
In Bulgaria’s startup ecosystem, securing seed funding is crucial for early-stage ventures, enabling founders to reach initial milestones and attract further investment.
“Founders should recognize that they don’t need to know everything and should seek professional advice to ensure their product is truly solving a problem, as many skilled engineers can become too focused on the technical aspects and disconnected from the market need,” explains Angel Hadzhiev, Venture Partner at SeedBlink.
Seed funding provides startups with the financial means to validate their product-market fit, but founders must also navigate the complexities of team dynamics, market feedback, and adaptability.
Botty Dimanov, CEO and CEO and Co-founder of Tenyks shares his experience: “In venture capital, success relies on finding outliers — individuals with unique, standout skills or experiences — who, after self-reflection and identifying their special quality, can build a strong team to solve a significant problem despite the challenges of a startup.” 👉 Discover more in episode 2!
Rising VC activity in Bulgaria
Bulgaria’s startup scene has evolved, with accelerators, co-working spaces, and over 10 active VC funds now supporting a growing wave of innovation and entrepreneurship. Compared to years ago, capital availability has significantly improved, especially at the Series A stage. 👉 Episode 3 deep dives in that stage!
“We’re on the right track, with an abundance of capital, exponential growth in startups, and a surge in entrepreneurial ambition — especially compared to just 7–8 years ago when active funds were still a mirage and Bulgaria now ranks first in entrepreneurial intent across youth,” shares Ned Dervenkov, CEO at BESCO.
As seen with success stories like OfficeRnD and AMPECO, Series A funding brings both validation and new pressures — including shifting strategies, team changes, and intensified investor expectations. International expansion adds further complexity, demanding the discipline to focus growth efforts.
More and more, Bulgarian startups are proving they can build globally competitive products that scale — often succeeding by being significantly better than established alternatives in more mature markets.
From product-market fit to growth mode
After achieving product-market fit, startups enter the growth stage; scaling operations, securing Series A/B funding, and optimizing internal structures become top priorities.
“The most obvious and inevitable challenge I’ve observed since starting my career in venture capital and private equity — where we’ve always focused on Series A+ expansion — is the availability of scalable capital, especially as companies often scale too fast, too soon, without proper market analysis or adaptation, leading to inefficiencies being mistaken for growth,” explain Diana Aladzhova, Partner at Silverline Capital.
Founders must shift from hands-on leadership to building resilient, process-driven organizations. This transition involves strengthening financial reporting, securing reliable capital, and hiring for key leadership roles. Yet, many struggle by scaling too fast, exposing internal inefficiencies, or misjudging new market demands. 👉 Check the rest of the story in episode 4!
“The main consistent hurdle throughout the year has been managing cash flow, whether growing organically or through mergers and acquisitions,” shares Dimitar Dimitrov, CTO at Wiser.
Expanding across borders
The expansion phase typically follows successful domestic scaling, with companies entering new regions or verticals. Here, localized research, cultural adaptation, and efficient capital use become essential. According to the European Startup Network, over 60% of Bulgarian startups prioritize market-specific insights before expanding abroad.
Securing Series B funding hinges on proof of international traction, operational scalability, and a clear path to profitability. As seen with companies like Payhawk, Bulgarian startups that combine strategic leadership with market readiness are increasingly attracting regional and global investment.
Payhawk, Bulgaria’s first unicorn, has achieved global success by thinking internationally from day one, despite coming from a small market.
“We always wanted to solve a big problem, and we knew eventually we’re gonna get there,” shares Konstantin Dzhegezov, CFO at Payhawk.
However, many successful Bulgarian companies move their headquarters abroad (like Payhawk’s HQ in London) due to regional challenges in Southeast Europe, including skepticism from Western investors. These investors are often cautious about the region unless it involves global tech assets.
Capital for Bulgaria’s emerging businesses
“I’ve worked in M&A in Southeast Europe for a long time, and it’s a challenging region to sell assets from because it’s often overlooked in favor of Central or Western Europe — unless the asset is a globally relevant technology company,” says Rossen Ivanov, Managing Partner at BlackPeak Capital.
Bulgaria is investing in initiatives to support startups, such as BEAM, a stock market segment that helps young companies raise up to €8 million annually with simplified regulations.
“Five years ago, raising capital through the Bulgarian Stock Exchange was only possible for large, established companies, but the BSE’s BEAM market has changed that by making it accessible to small and medium-sized businesses, even those in early development stages,” shared Zhana Hristova, Manager BEAM Market at Bulgarian Stock Exchange.
The discussion in episode 5 also explores different exit strategies for startup founders, primarily focusing on IPOs and strategic financial exits. 👉 Watch episode 5!
Success is not one-size-fits-all. The Bulgarian startup ecosystem is still emerging, but with the potential to inspire a new generation of entrepreneurs.
