site.btaEIB's Teodor Radonov: Bulgaria Has to Catch Up with Venture Financing

Over the last 12 years, Bulgaria has managed to create and develop the ecosystem for private equity and venture financing. But despite the positive trends, the country still lags significantly behind Western European and Baltic countries, said Teodor Radonov, head of the European Investment Bank (EIB) office in Bulgaria. He was participating in an international conference, "Financial and Investment Support for SMEs - Sofia International Money Expo" (SIMEXPO2024),, which opened in Sofia on Tuesday.

According to Radonov, the European Investment Bank, in particular through the establishment of 13 funds with a capital of almost EUR 150 million, has been a major contributor to strengthening the Bulgarian ecosystem over this decade.  

"The amount is not mind-boggling, it is even very modest for what has been achieved", Radonov said, adding that through the provided capital an additional private financial resource of EUR 300 million has been attracted. "We are talking about almost EUR 450 million to have a relatively developed ecosystem, representing to a large extent the engine of innovation and investment in this kind of companies."

Regarding the recent actions in the direction of the development of the Bulgarian ecosystem for equity financing with the support of the European Investment Bank, Radonov recalled that EUR 150 million were allocated for this purpose under the National Recovery and Resilience Plan.

"Two venture capital funds have already signed up. One more is expected by the end of the year. Maybe with all the resources it will be between 8 and 10 funds that are going to establish themselves in the market. For the most part they will be funds we have worked with in previous years, but not only that," he said. The EUR 150 million capital in question is expected to mobilixe an additional EUR 500 million or so.

Despite the great achievements in Bulgaria over the last decade plus in the development of venture and private equity financing, the EIB representative stressed the huge gap that exists between the figures and processes in the country with the situation in Western Europe.

"If we look at equity to GDP as a percentage, we are somewhere between 20 and 30 times lower than our western neighbours. So there is certainly a lot more to do," Radonov explained, referring to the report that former European Central Bank President Mario Draghi delivered in the second half of September.

"On the positive side, the Draghi report recognizes these shortcomings (in the EU's large gap in venture financing vis-à-vis the US) and the InvestEU programme is expected to be strengthened in the next programming period, as well as increasing the budget of the European Innovation Council", Radonov added and warned: "However, as the European Commission has stressed these days, future funds, even grant ones, will be linked or expected to be linked to reforms, as is now the case under the National Recovery and Resilience Plan (NRPP). If we look at the country's success rate under the NRRP, this will rather be a challenge."

The organizers of the fifth edition of the forum "Financial and Investment Support for SMEs - Sofia International Money Expo" (SIMEXPO2024) are the Bulgarian Chamber of Commerce and Industry (BCCI), the Investment Council at BCCI, the Executive Agency for the Promotion of Small and Medium Enterprises (EASME). The aim of the conference is for the representatives of financing institutions, investment and guarantee funds and investors to introduce their products to the participants from the business circles in the country.