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Morningside Hill backs two Bulgarian companies with near €1.5M

VR experience, Morningside Hill
Image credit: Unsplash
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The Sofia-based post-seed venture capital fund Morningside Hill recently added two more companies to its portfolio. The VR development company ZenART, specializing in the provision of photo-realistic interactive experiences, was backed with around €1M and the company for food supplements Vital Concept received €500K. 

“We are already seeing the vast applicability of 3D across multiple industries and expect that in the future the use cases will increase even more. ZenART’s visualization technology will find great applicability in the cinema industry as it saves creative businesses money and time. The same applies to corporations that can use VR to create immersive showroom experiences, training, and visualizations of buildings and products. Unlike traditional 3D asset development which applies texture on top of polygons, ZenART uses photogrammetry technology and works with real photographs and scans to bring more depth, variety, and texture to their 3D assets,” Pavel Velkov, Managing Partner at Morningside Hill shares for The Recursive. 

“After COVID customers have become increasingly cautious about their health and lifestyles and we expect that food supplements and other health products will see a lot of demand in the next 10-15 years. Therefore, the industry potential was one of the reasons why we decided to invest in Vital Concept. Additionally, the company has already shown its ability to scale internationally as it sells through Amazon to customers all around the world. The high-quality of their products that makes them competitive with global brands and the experienced team were also important factors for us,” Velkov adds. 

Immersive VR experiences

ZenART, the company that creates photo-realistic VR experiences by using photogrammetry technology and turning 2D photos into 3D assets, was founded in 2019 by three veterans from the gaming industry – Ivan Nikolaev, Georgi Georgiev, and Tihomir Nyagolov. In the beginning, the startup had the vision to bring the world close to individual customers by creating high-quality and interactive VR destinations for B2C clients. Later on, the company shifted its business model to B2B, in order to adjust it to the market needs and market development. “Even though our efforts are currently focused on the B2B market, we have already successfully released our Zen Universe VR travel catalog on Steam. It is our best intention to extend it with new VR destinations when we get hold of available resources,” explains the team of ZenART 

Currently, the team of ZenART consists of 30 people who are professionals from the cinema, media, and entertainment industries, but with the current investment, the company will aim to double the number of employees. As the team of ZenART points out, for its two and a half years on the market, the company has managed to become financially self-sustainable. However, they also share that they are having difficulty in increasing their production pipeline with the currently available resources, and even struggle to meet the current deadlines with the available staff. 

“We want to use the momentum we have created so far and take on more projects. We will use the Morningside Hill investment for expanding the team and increasing our capacity so that we can take on more projects,” the ZenART team highlights. 

In the short term, the company will aim to land its current projects successfully and to acquire more bandwidth. Their long-term goals, apart from extending the Zen Universe catalog, are to break into new business verticals. The team outlines that they would enter the cinematography, education, and automotive industries even though there are many more industries that would benefit from VR in their training, production, or prototyping processes. 

How does ZenART use photogrammetry to make 3D assets?

ZenART has managed to gain market recognition – the team has been selected among a handful of global developers and was the first Bulgarian company to win the recognition of Epic Games and was granted the MegaFunds Award in 2020. The team has also been recognized as the Most Innovative Enterprise of the Year in the Creative Industries at the 2019 national forum “Innovation and economic growth”.

The competitive advantage of the company stems from the fact that unlike many of the other VR studios which normally use computer-generated imagery, ZenART employs a technology called photogrammetry. The team of ZenART explains for The Recursive that photogrammetry allows for large collections of 2D images that consist of thousands of photos of physical objects to be turned into 3D assets.

 “We have vastly improved this process by developing our own algorithm through a unique combination of specialized software. This enables us to use photogrammetry on a grand scale. This is a major advantage when it comes to recreating an actual environment or a landmark,” the team of ZenART shares. 

From the archives of ZenART VR - Zen Universe
From the archives of ZenART VR – Zen Universe

The 3D creators walk us in detail through the process of transforming 2D visuals into 3D assets. “First we scan the objects that we want to turn into 3D objects, then we turn the 3D objects into VR. We use drones and various types of cameras in order to capture objects from any possible point of view. Then, our 3D artists use software tools to polish and enhance the assets – Z-brush, Maya, Houdini, Substance 3D, 3DS Max, Photoshop, Reality Capture – to name a few. Once we have the 3D objects ready, we arrange them into an interactive virtual environment, by integrating them with the Unreal Engine,” they explain. 

Pure food supplements

Founded in 2015, Vital Concept manufactures its organic food supplements in a certified factory in Germany and sells its products on both the Bulgarian and international markets. On the local market, more than 500 pharmacies and stores offer Vital Concеpt’s supplements, and the company partners with some of the biggest retail chains in its industry such as SoPharmacy, Ceiba, and Medea. 

The company offers a full range of supplements for sports, weight loss, detox, strengthening the immune system, as well as supplements for good metabolism, probiotics, vitamins and minerals, and gender-specific supplements. 

More about Morningside Hill and its future plans

The news comes after in May 2021, the fund invested over €3M in the Bulgarian startups Threeding, Ensk.ai, AQUILE, and Neurorehabilitation Robotics. Morningside Hill was created at the beginning of 2019 as an investment intermediary of the Funds of Funds in Bulgaria (FMFIB). With €38.5M in management and a term of 5 years, the fund is expected to make equity investments in 25 to 30 companies, connected to the Bulgarian market but developing scalable global solutions. The post-seed venture capital fund is industry agnostic and focuses on companies that either have 50% of their revenue, generated in Bulgaria, or at least half of their staff is based in Bulgaria. With companies in its portfolio such as the biotech Nasekomo and the food delivery platform Gastronom.bg, Morningside Hill VC expects to invest in around 2-3 more startups by the end of this year.

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Elena is an Innovation Reporter at The Recursive, an online media dedicated to the emerging tech and startup ecosystems in Southeast Europe. She is keen on sharing the innovation stories that shape the regional ecosystem and has a great interest in fintech, IoT, and biotech startups. Elena is currently finishing her Bachelor's Degree in Business Administration and Political Science at the American University in Bulgaria.