A new venture capital fund is soon to be launched in Bulgaria – BrightCap Ventures, which will be the sixth player of its type in the country after Eleven, LAUNCHub, Neveq, Empower Capital and BlackPeak Capital. It will have a resource of €25 М for investments in innovative small and medium-sized companies. The bulk of the funds, or €20 М, is fully recycled resource from European Investment Fund’s (EIF) JEREMIE program. The fund manager has attracted the remaining €5 M from private investors, fulfilling EIF’s requirement for private participation as well. In the future, EIF may bring additional funds to BrightCap Ventures if it achieves successful results. The fund was founded by four IT and finance industry veterans with international reputation. The first investments are expected to be realized by the end of this year.
The fund manager, who will invest and manage the funds, BrightCap Ventures, was selected by EIF in competition with 17 other candidates. Currently the manager is in the process of closing with private investors from Bulgaria, Israel and Switzerland. In the future, additional private money may be raised, which will allow the fund to invest beyond the borders of Bulgaria. Currently eyes are set on Europe, but the fund may also consider North American start-ups.
BrightCap Ventures will invest in exchange for minority equity stakes (between 5% and 20%) in small and medium-sized companies that develop innovative technology products and services. Sectors defined as priority by the European Union will be of primary interest, such as artificial intelligence, big data processing, medical technology, blockchain and financial technologies. The fund will seek companies that develop a high-tech, unique product with defendable intellectual property and potential for the global market. Additionally, traditional sectors for the Bulgarian economy will also be considered such as the obvious IT and outsourcing, but also agriculture, pharmacy, transport and new foods. Key criteria for assessing projects include team’s experience, technology, target market size and the potential for global growth.
The size of investments in companies in the growth stage is defined as €500,000 to €3 million. Separately, the fund will also invest between €50,000 and €200,000 in start-up projects. The initial resource is planned to reach about 30 companies seeking money for growth and 10-15 start-ups. The fund’s horizon is 10 years.
BrightCap Ventures shall be an active investor with its team’s expertise being available to portfolio companies to solve operational challenges. The fund’s partners represent a mix of well-known international experts in finance and high technology. Georgi Mitov has led two successful start-ups, Sciant and Aviaso, sold to global technology giants VMWare and Honeywell. Elina Halacheva is a financier with a career in banks and investment funds in New York and London. Daniel Lorer is an entrepreneur with a string of successful companies; one of them, Mercury Interactive, sold for $4.5 Bn to Hewlett-Packard. The fourth partner in BrightCap Ventures is Diana Stefanova, Managing Director of VMWare Development Centers for Europe and Bulgaria, and well-connected in the Silicon Valley.