By and large, capital markets mainly attract large companies and SMEs rarely turn to public markets to raise funds for their development due to expensive listing requirements and high risks. Recently, however, public markets are becoming increasingly modern and inclusive – a change that is made possible by the creation of more partnership between public and private entities and associations.
This week, for example, the Romanian equity crowdfunding platform Seedblink that aims to democratize and decentralize the process of investing announced that it will combine its efforts with the Bucharest Stock Exchange (BVB) to accelerate its impact and further support the development of the Romanian fundraising ecosystem. The goal of the partnership is to help founders at different stages of their development have better access to funds by allowing promising tech startups from Seedblink’s portfolio to receive support in evaluating their prospects of becoming public in one of the listings managed by the Bucharest Stock Exchange. This collaboration aims to bring advantages to both entrepreneurs who are aspiring to finance further growth as well as to crowdfund investors by offering them the opportunity to consider the BVB as an option when making investments in public listings. The significance of the signed memorandum of understanding is that it will modernize the local capital market by allowing more tech startups to access alternative funding sources and supporting them on their IPO journey.
The Chairman of the Board of Governors of the Bucharest Stock Exchange, Radu Hanga, noted that he considers Seedblink as an incubator for new listings as the platform is a significant contributor to the growth of the startup ecosystem of the country. Moreover, according to him, their partnership fits well with the “Made in Romania ”initiative that the BVB organizes with the vision to create a platform for connecting the local founders with private and public investors. Adrian Tanase who is the CEO of the Bucharest Stock Exchange explains that in the last couple of years more SMEs are trying to receive financing from the capital market and the AeRo instrument of BVB which serves as a special financing market dedicated to SMEs and Seedblink are the main fundraising channels for developing early-stage startups.
The Bulgarian analogue for SMEs public financing market
Similar to the AeRO market of BVB, is the SME Growth Market beam that the Bulgarian Stock Exchange introduced at the end of 2020 to allow small ventures to fundraise with terms that are less demanding than those of the regulated main market. By being listed on the BEAM market, companies benefit from the opportunity to raise funds of up to €3M without the need to have an approved prospectus by the Financial Supervision Commission, and from the wide access to private and institutional investors they receive. With the goal to enrich the knowledge for funding opportunities of companies with promising business models, last year the BSE also launched the beamUp lab program which is planned to last for one year, and engage 20 selected in strategic meetings.
This week, three months after the Bulgarian biometric identifications startup Biodit became the first company to enter the Beam market, the private equity firm Impetus Capital announced that it is preparing a new listing on the beam market of one of its portfolio companies. Highlighting that the SOFIX index is becoming increasingly technological, the Partner of Impetus Capital Viktor Manev shared that the listing will target to raise €6M. So far, the venture stage investor has funded the mobile service provisioning company Alterco, the marketing analytics startup A4Everyone, the search engine for life sciences startup BioSeek, Biodit, and BrowsWave which develops business intelligence sales SaaS tools.
The Greek way of evaluating investment-readiness
In Greece, the Athens Stock Exchange partners with the American-Hellenic Chamber of Commerce to support SMEs access more financing opportunities in the capital market through its Roots program. The goal of the initiative is to prepare founders for their potential IPOs by providing them with training, fundraising advice, and networking opportunities. The first cohort of Greek startups that participated in the program includes BioSolids which produces organic compost soil fertilizers, and the ML computer vision software company Irida Labs.