Dronamics, the Bulgarian aerospace startup for unmanned drones, officially received approval from the Bulgarian Stock Exchange (BSE) for its IPO on the BEAM SMEs Growth Market. The cargo drone company will be looking to raise €3M which is the maximum amount available on the BEAM market. To raise the target sum, Dronamics will offer individual investors 5 334 081 preference, dematerialized, Class B shares with €0.5 nominal value of each share.
The news is followed by the announcement that “The Black Swan”, the first prototype of Dronamics’ cargos will be presented to the wider public in just a couple of weeks, on the 7th of December.
“Our team grew significantly during the last year. Right now we outnumber 80 people while in December last year we were only 25. This growth allowed us to achieve most of our milestones which is the reason why we are doing the IPO on the BEAM market. In December we will show the first prototype, this will be followed by a test program. We expect to conduct the first flight in Q1, and following this, we will be ready to start operating commercial flights together with DHL – first serving the European market and then going outside of Europe,” Svilen Rangelov, co-founder of Dronamics shared with The Recursive.
This summer, the two companies signed an agreement to start offering same-day drone cargo deliveries via the proprietary unmanned aircraft of Dronamics, “Black Swan”.
Fueled by a variety of financial vehicles
The Bulgarian cargo drones company aims to conduct its first unmanned commercial flights in 2022. Following this milestone, Dronamics will fundraise a larger round from a strategic investor. Therefore, individual investors who decide to participate in the IPO on the BEAM market will join right before the next financial venture capital boost.
“Amazon went public at a valuation of $300M while these days successful startups make IPOs at valuations of billions of dollars. Therefore, a big part of this value generation is locked inside private capital markets which restricts the access of individual retail investors. That is why with the current IPO we aim to democratize the process,” Rangelov explains.
The auction will take place in one stock exchange session on the 2nd of December 2021 and the lead underwriter which will be in charge of the process is the financial products and services firm Karoll Group. In plain language, this means that the company will pay out dividends to its shareholders before common stock dividends are issued and that the share certificates will be converted into electronic forms.
As of now, the company has over 40 angel investors from all over the world. Rangelov highlights that throughout the years Dronamics has found a great fit with angel investors who include entrepreneurs, managers, and aviation specialists such as the founders of Telerik, and the former manager of DHL.
The legal mechanics around the IPO
In order to ensure that it is able to retain its access to venture capital financing and still open up to individual investors, Dronamics worked closely with Karoll and the Bulgarian legal consultancy firm, Tsvetkova Bebov & Partners. For this purpose, the company used Special Purpose Vehicle (SPV) instruments and a SAFE investment in the form of a convertible loan financing instrument.
From a legal perspective, the team had to register a new holding Dronamics Capital which then made an investment in the already established company Dronamics Global. This allows the company to list its new holding company on the BEAM Market. Almost the full value (90%) of the sum raised during the IPO on BEAM will be invested in Dronamics Global. The remaining 10% will be invested in the maintenance of Dronamics Capital Holding.
“When the time comes for us to list our UK-headquartered company on the international stock exchange, the retail investors in Dronamics Capital will be offered the option to trade their shares for shares in Dronamics Global and participate in the IPO of the international company,” Rangelov adds.
The new holding has a new Board of Directors which consists of Teodora Gerdjikova who was responsible for the expansion of Uber in SEE, Momchil Vasilev, Managing Director of Endeavor Bulgaria, and an unnamed Bulgarian businessman who has 20 years of experience in corporate governance and capital markets.