Introduction to the Sofia Startup Ecosystem
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Sofia, the beautiful capital of Bulgaria, is situated in the heart of the Balkans. It is one of the favorite destinations for tourists as it one of the oldest cities in Europe, where you can see buildings of all architectural styles, yet fill in a modern city. As a country with a long history and plenty of interaction with different nations, our cuisine has become one to suit the liking of many. Overall Sofia is a great destination for tourism and has the prerequisites for a good place to be living in. Let’s talk about business then!
Is it suitable for a StartUp? Afterall, it is a post-communist country. We all know that post-communist countries don’t do financially great, right? These thoughts are certainly close to the mind, when talking about money. In this report, we will take a look at success stories in Sofia, opportunities and disadvantages for startups,as well discuss some of the biggest players in the startup ecosystem. In StartupBlink’s 2019 report, Sofia ranked 1st in Bulgaria and 88th globally.
Successful Startups in Sofia
First off, if you are still unsure whether this article is worth the time, since Bulgaria isn’t a compatible word with a StartUp in your mind, let’s take a look at a few successful examples:
- Chaos Group aka V-Ray (Sofia, US, Korea, Japan) – powerful rendering and simulation technology to help you visualize anything imaginable. This year(2017) they were awarded with an Academy Award for their technological contribution to making stunning imagery for movies like – Deadpool, Captain America and Doctor Strange.
- Pcloud (Sofia, Switzerland) – Secure cloud storage for end users and businesses. Having over 6M users and winning the Best Security Cloud platform award, it sure is on the road of success!
- EnhanCV (Sofia) – Create custom looking CVs with EnhanCV, that standout from the crowd. They have helped more than 250 000 people land their dream jobs with an outstanding CV.
- Craze (Sofia, Amsterdam) – Mobile app to give you personalized suggestions for the events around you. You can find around 1.1M events around the world in their app. Something extremely useful if you are looking for networking opportunities! (Personally used it for networking).
- Tickey – One button to buy tickets for public transport.
- Headreach – If you want to find somebody’s email or find people by position in their company and their email – that is the tool. Why mention – it is currently the most handy and price competitive sales/sourcing tool out there, that I have found and I have searched a lot!
Advantages for startups in Sofia:
Sofia is a great place to start a company for the following reasons:
- Tax relief: Bulgaria with its tax rates is a true tax haven for a European country.
Annual corporate tax (flat tax) – 10%. You can get up to 500 euros of tax relief if you pay before 31st of March on the following year as well! Tax on dividends – 5%
Income tax on natural persons (flat tax)– 10%
And the fees to open up a company in Bulgaria are relatively low. financially. It might take some time if you are not used to our bureaucratic system and have no Bulgarian friend to help you out. Read more here.
- Talent: You will find an abundance of talent in Sofia, which is relatively cheaper when compared to megapolises.
- Low living expenses: As compared to other countries, living expenses in Sofia are relatively low. You can afford to stay lean in the initial stages of your startup. What’s more, despite being inexpensive, the city has perks such as good food, closeness to nature and the mountains, a variety of outdoor sports, and a good standard of living in general.
- Supportive community: There is a great community of entrepreneurs in Sofia that you can seek help and mentorship from.
Disadvantages for startups in Sofia:
- Regulations, Policy, Banking, bureaucracy – There is one major annoyance in regards to regulation – Time waste. You will waste some good amount of time, writing redundant paperwork the old school way and waiting for some institutions to respond. No way around that. That applies to most aspects of running your business such as accounting, staffing, payments… paying your bills.
- Funding – You may find it hard to get proper funding for your startup when you get to the seed and growth stage. However, this doesn’t seem to be too much concern taking into account that the flights to London are 30 euros.
- Target Market – If there is one concern, that you should consider, it is – do you need to have face-to-face contact with your target audience. It is not a good idea to target the Bulgarian market unless you have something extremely hot in mind. Thus you will have a foreign market and you need to communicate online with your target audience. This might be a bit difficult in the customer development/ market fit stage. So network now and then come to Bulgaria to build or check the flight tickets to your target location.
Biggest Players in the Sofia Startup Ecosystem
Incubators:
Start It Smart pre-accelerator – Excellent mentorship program of over 40 trainings and a coworking space. As far as, I know this is a pre-accelerator, so no funding is available, currently. Note: You will most likely need a Bulgarian in your team to participate. This is one of the oldest incubators in Bulgaria, has helped more than 300 startups and has around 150 partners in this field. They have also build a great community around their events (read more in the meetup/events paragraph) of hundreds of startup minds. Overall, if you are still on idea stage this is the way to go, it builds trust in future investors, funded accelerators and angels.
Sofia Tech Park – government project to support all innovative tech startups and provide environment, offices and a wide range of business and tech services. Their mission is to make the link between technology and current businesses and help Bulgaria become a prestigious location for innovation and research.
Accelerators:
Eleven – Provide Seed and Acceleration stage funding, so 15-20K EUR initially and up to 200K EUR. The equity they participate with is from 6-25%. The program there will take you from the idea stage, usually, they work with Start It Smart, and then help you get to the seed stage.
Founder Institute – Idea stage accelerator and startup launch program. It has a thorough curriculum and some of the brightest minds in the startup area, that have seen it all, as mentors. Make sure to check their application fees. You can find them on facebook for info about events here – https://www.facebook.com/FounderInstituteSofia
Venture Capitals and Angles
CEO Angels Club – As the name implies it is Venture Capital made of CEOs, who know you struggles. Part of the management has even managed Eleven in the past, so they’ve been around, helping startups. You can check their facebook page for meetups and networking events
LaunchHub Ventures – is a Seed stage Venture Capital firm based in Sofia investing in early-stage startups in Bulgaria and the wider Southeastern Europe region
Bulgarian Angels – The link between entrepreneurs and angels. You can also meet them in the well known international event – Get In The Ring. They organise events too, so you will have a perfect opportunity to meet them.
Honorable mention – Unicredit Bulbank has started investing in startups and the investments start at around 200K EUR.
Neveq – Venture Capital based in Sofia, that helps seed and growth stage startups in Central and Eastern Europe. You can get an average of 2M EUR funding and a solid partner behind you back.
Coworking spaces
Betahaus – The oldest and largest coworking space in Bulgaria, it is where startups and entrepreneurs grow. A safe bet for every small team or digital nomad. Not only that it has a huge space, plenty of rooms and desks, but you can work for 5 days a month at any other Betahaus around the world. Plenty of perks for the whole Betacommunity. Be sure to check their weekly events and especially the Betabreakfast.
SOHO – The other coworking space that has some history and community behind it. It is situated in the city center, on a convenient spot near a subway station. They have a lot of educational events organised not only related to startups, but psychology, productivity, and art. There is also a SOHO cozy art villa near the Black Sea in the Sinemorec village, which is a great destination during the summer.
Init Lab – aka the Hackersplace in Sofia is a coworking space focused on creating a very strong tech community. They organise plenty of events related to coding and tech.
Cosmos – Situated in the center of the city center, in a house, that is a monument of culture, it is one cozy place that is close to pretty much everything in Sofia. Beware that the prices in the city center are a bit higher, as you would expect. They organise a lot of events related to business development, marketing and sales, so it is a good spot for non-techy co-founders to network and learn.
Coworking space by Puzl – This is where some of the top startups from Bulgaria bloom, along with Eleven and LaunchHub, so if you need some funding – it is on the same floor 😀
Startup Education
There are a bunch of academies that provide quality education in the areas of entrepreneurship and IT, but their courses are in Bulgarian. However, these are the places to find your mentors or talent to join your team(almost everybody knows English in Sofia)!
SoftUni – They provide arguably the best software education in the whole country. This is where a lot of tech talent is born in Sofia, so you can find some young talent to join your team. Or you can go to their free events related to IT or Personal development (in Bulgarian again), preferably with a Bulgarian friend and connect with a particular lecturer or guests.
ItStep – Software academy with free events related to IT, Graphic Design and Management. Their events are in English, depending on the lecturer.
Telerik Academy – Organise IT courses along with Digital Marketing courses. The latter I believe to be in English.
Entrepreneurs Library – Located in Betahaus, it is a collection of more than 75 books related to startups, management, productivity, sales, marketing, lean, product development, etc. gathered by ABLE and Betahaus.
Startup Communities
ABLE – A great community of over 200 members to help entrepreneurs and young leaders. They organise a huge number of events all across the country, that you can check here https://www.facebook.com/ABLE.Bulgaria/.
Startup Foundation – Organisation that promotes entrepreneurship and startups in Bulgaria and organises helpful events. There you will find info on current startup affairs and events.
Startup Meetups and Events:
Fu*k Up Nights Sofia – Monthly meetings, where unfortunate owners will share how they have messed their business, so you wouldn’t make the same mistakes.
Silicon Drinkabout Sofia – It is a must if you want to get to know the startup community in Sofia. You will regularly see members from accelerators and popular startups, along with some mentors and great like-minded people. It is every Friday night in a different pub/bar in Sofia, so you will get to know the city rather fast. Organised by the founders of Start It Smart.
Betabreakfast – Weekly meetup where you will get to know the owners of one trending startup. It is usually every Wednesday at 11 o’clock with up to 20-30 people. Location – Betahaus
Startup Grind Sofia – regular networking events with guest lectures from the IT world.
Startup Safari Sofia – these guys will walk you through the city and show you around the startup world
Major Startup Events:
Webit – The Startup Event you shouldn’t miss. 5000 attendees, 200+ speakers, 100+ startups. You can find people or talks related to any area in the startup world.
DigitalK – One of the major events in South East Europe, where you can meet more than 2000 entrepreneurs, investors, and digital marketing professionals. It is usually 2 days, with more than 60 speakers.
Startup Weekend Sofia – it is a rocket launcher for idea stage startups. Why? Basically, you have 3 days to generate an idea, pitch it, build an MVP, pitch and state your case to judges, get help developing your idea.
Conclusion:
There are a lot of benefits for entrepreneurs starting their company in Bulgaria: a good place to live in, a tax haven, quick and cheap access to the internet, tech talent, low costs of living as well as English speaking population. While there are a few hiccups along the way, such as bureaucracy and investment, it is quickly developing into a favorable hub for startups.
About the author:
I am Aleksandar Petkov and in my day time, I am the guy making connections. Connections with people and connecting the dots when imposed with a problem. In my leisure, I hike around with my camera, meditating through its viewfinder 🙂
I am currently working to understand more about the challenges startups face in regards to recruiting and hopefully build a tool that solves them. The current shape of our tool (Stowhire.com) is a simple applicant tracking system that incorporates just the basic of features that solve Email clutter, CV note taking and tracking applicant stage. We are still working to understand in which direction its development should go.
So, whether you are struggling with recruiting, you need to find a suitable recruiting tool or you need a hand with client prospecting, hit me up on my LinkedIn. I would love to have a chat and hopefully point you in the right direction!
Outro:
So there you have it! A brutally honest opinion of someone who had the full chance to stay in the UK and develop a startup there, but said – “Screw this, I’m going back to Bulgaria… there is Lyutenica(traditional meal)”, to seek some more compelling environment and possibilities!
Resources:
Useful links and thoughts on the startup ecosystem in Bulgaria, but it is a bit old – Jan 2016
Forbes on why Sofia is a great destination for startups
Why Sofia is the new Berlin in the eyes of a traveler.
Thoughs on what are the limits in the Bulgarian startup ecosystem
