Public investment didn’t replace the market — it helped Bulgaria build one.
What you need to know
Bulgaria’s venture capital market didn’t exist 15 years ago. Today, it’s shaping innovation across southeastern Europe.
Why this matters
Long-term public investment helped unlock private capital, talent and confidence — turning Bulgaria into a launchpad for deep tech startups and high-value jobs.
A number that tells the story
Almost 500 of 1 245 startup investments in southeastern Europe over the past five years were made in Bulgaria.
Venture capital + long-term backing
When Sofia-based LAUNCHub Ventures led a €7 million investment round in a Croatian company that provides cybersecurity for AI chatbots, it represented another great step into deep-tech innovation for the Bulgarian venture capital market. The €74 million fund’s backing for SplxAI in 2025 was the latest chapter in a 14-year story that has seen Bulgaria go from a seed-funding desert to a Balkan hub for seed and growth financing.
The transformation started with a call for proposals for venture capital funds from the European Investment Fund, which had some money left from Bulgaria’s allocation under the JEREMIE (Joint European Resources for Micro to Medium Enterprises) initiative, a programme backed by the European Commission and the European Investment Bank Group. The €21 million in JEREMIE financing was split between LAUNCHub, which took €9 million, and Eleven, with €12 million.
Both Eleven and LAUNCHub have since raised new VC funds, still with the backing of the European Investment Fund. The EIF approved a further commitment to both managers’ latest funds in September 2025. But the biggest outcome has been Sofia’s assumption of the role of one of the VC capitals of Southeastern Europe.
“This has been important for the whole region,” says Todor Breshkov, a LAUNCHub founding partner. “Today the region resembles the biggest European markets, with tickets that go up to €5 million.”
What changed
- First-time VC funding under the JEREMIE programme
- Long-term EIF commitments to fund managers
- A growing ecosystem of founders, advisors and investors
What's the role of public finance in venture capital?
Public finance played a catalytic role in Bulgaria’s venture capital market. Early EIF backing addressed a classic market failure: abundant entrepreneurial talent, but little risk capital willing to invest locally.
Through programmes such as JEREMIE and InnovFin — backed by the European Commission and the EIB Group — the EIF helped establish fund managers, crowd in private investors and connect Bulgaria to the wider European VC market.
Why public finance mattered
- High early stage risk deterred private investors
- No domestic VC track record
- Weak supporting infrastructure
What it unlocked
- Sustainable VC fund managers
- Follow-on private investment
- Regional expansion into underserved markets
Expert insight
Q: What has changed most in Bulgaria’s venture capital market?
A: We are very happy to see that these efforts, which we started many years ago, are now bearing fruit. A significant number of fund managers that we have backed in their own start-up phase have delivered on their promises and grown into players that are here to stay.
Key trends
- Larger fund sizes
- More private capital alongside EIF funding
- Faster scaling of regional startups
What to look for next
Deeper integration of southeastern Europe into Europe’s innovation economy.
Building venture capital from scratch
When Eleven and LAUNCHub answered the European Investment Fund’s call in 2012, Bulgarian venture capital didn’t exist. Worse, the infrastructure that supports starts up – accountants or lawyers with expertise in early-stage companies, office-sharing facilities, supportive regulation – was non-existent.
Eleven put its ambition for Bulgarian venture capital in its name – for a body to escape the gravity of the Earth, it needs to travel at 11 kilometres per second. “It’s the metaphor for an organisation that helps entrepreneurs overcome all the challenges of the local market,” says Daniel Tomov, a founding partner at Eleven. “That’s materialising now.”
Eleven’s funds have invested in a range of successful startups, including Payhawk, which became the first Bulgarian unicorn – a startup that reaches a valuation of $1 billion – and Dronamics, a drone company that started with €25 000 from Eleven and has since raised €50 million in financing.
“The European Investment Fund was absolutely instrumental in all this,” says Tomov. “Before the Fund came in, you had the talent, but there was no capital. They provided the missing link.”
Tangible impact
- High-value job creation
- Reduced brain drain
- Companies scaling from the region to global markets
Bulgaria startups innovate
Looking beyond Bulgaria’s borders has also been the basis of the success of BrightCap Ventures.
Bulgarian-born Elina Halatcheva, one of two female founding partners at BrightCap, worked in banking and private equity in New York and London and studied at Stanford University. Before returning to Bulgaria with her partner for the birth of her first child, she noticed how “Eleven jumpstarted the ecosystem.” Her idea was to connect to the Bulgarian diaspora, bringing companies founded elsewhere into the burgeoning local venture capital system.
At first, it seemed to her that many Bulgarian startups were simply copying ideas from abroad. Since she started BrightCap in 2018, that has changed. “We’re getting category-defining product companies that develop an innovative product no one else has,” she says, citing her firm’s investment in LucidLink. Founded by a Bulgarian and an American, LucidLink has developed technology to stream very large files from the cloud.
The European Investment Fund backed BrightCap’s first €25 million fund with €20 million from the JEREMIE programme.
In a measure of the market’s growth, BrightCap’s second fund, which closed in summer 2025, stands at €47.5 million, with €30 million from the European Investment Fund. Its focus is on Bulgaria and Romania, and its first investments include RobosizeME, which automates processes in the hospitality industry, and Tow4Tech, whose software connects towing companies and trucking firms.
“We are contributing to job creation in Bulgaria,” says Halatcheva.
What people get wrong about venture capital in Bulgaria
- Myth: Bulgaria lacks innovation talent
Reality: Talent always existed — capital was missing. The brain drain that afflicted Bulgaria for many years has been halted.
- Myth: Venture capital benefits only startups
Reality: It strengthens entire ecosystems, from legal services to local employment.
Key facts
Bulgaria venture capital at a glance
2012
EIF support began
~500
Startup investments in Bulgaria (last 5 years)
14% (an EU high)
Youth self-employment rate
Broad impact of Bulgaria VC
LAUNCHub's Breshkov agrees that the growth in venture capital has had a broad impact on the Bulgarian economy.
“It’s very important, because all those companies have created a lot of workplaces, which are usually highly paid and high value-added jobs,” he says. “It means the company stays in the country, using services and spending not only on taxation but on local salaries. The side effects have been even bigger than anticipated.”
The European Investment Fund's impact in Bulgaria also spreads beyond the venture capital ecosystem. The EIF has been an early supporter and anchor investor in several private equity funds like BlackPeak Capital and Invenio, and has recently approved a commitment to the first private credit fund in the country with Empower Capital.
At the end of 2025, the EIF and Bulgaria's Ministry of Innovation and Growth signed an extension of the JEREMIE mandate in the country until 2035. The EIF called this “a clear vote of confidence in what has become one of Bulgaria's most effective public financial instruments.”
