Bulgaria is steadily building its reputation as a startup leader in Southeast Europe, attracting over €264 million in investments in 2023. This marks a fourfold increase compared to five years ago and reflects the country’s growing importance in the region’s innovation landscape.
A report titled Private Investment in Bulgaria & South Eastern Europe 2024, created by the Bulgarian Equity and Venture Investment Association (BVCA) in partnership with the European Investment Bank and PwC, highlights the insights from the local startup ecosystem.
Between 2019 and 2023, startups across SEE attracted €4 billion in investments, with Bulgarian startups securing €1 billion, supported by the country’s comprehensive entrepreneurial infrastructure and government-backed initiatives.
“However, the vast majority of funds still go to businesses in an earlier stage of development, while opportunities for companies in a more mature stage of growth are more limited. And this year and next year in general are shaping up to be more challenging because of the declining number of actively investing funds,” the report notes.
Balanced ecosystem with challenges
Bulgaria leads the SEE region in investment value and deal count per capita, demonstrating its dynamic entrepreneurial environment. Key sectors like software and gaming accounted for half of the investment activity in 2023. However, funding challenges persist, particularly for startups in advanced growth stages.
The report points to declining activity among investment funds as a potential obstacle in the short term. To counter this, Bulgaria plans to inject €520-620 million in public capital between 2025 and 2029, while its anticipated Eurozone membership is expected to attract more international interest.
Reforms enabling pension funds and personal capital to flow into the startup sector could bring an additional €350-580 million.
Strengthening the foundation
Bulgaria’s startup ecosystem benefits from €400 million in active capital from fund managers and a growing emphasis on cross-border partnerships. Organizations such as BVCA, Endeavor Bulgaria, and the Bulgarian Innovation Hub are playing critical roles in providing mentorship, funding opportunities, and market access for entrepreneurs.
The Bulgarian diaspora abroad also contributes by facilitating international expansion for local businesses.
The report also emphasizes key strategies to sustain growth:
- Enhancing Bulgaria’s appeal as an investment destination.
- Supporting deep tech, AI, and sustainability-focused startups.
- Expanding private sector investment through angel investors and specialized funds.
- Strengthening the legal and tax frameworks to incentivize investment.
While challenges remain, strategic investments and continued support for innovation could position Bulgaria on the path to sustained growth in the years to come.
