As of August 1, and close to two months after the deadline to publish a final decision the Financial Supervision Commission has rejected the prospectus for IPO of the Bulgarian tech startup Biodit. Reasons were not publicly announced.
“Тhe commission does not recognize the company’s depreciation policy for a fixed asset depreciation that is consistent with international standards,” explains CEO Julian Sofroniev. The main asset of the company is its intellectual property which has been valued at €4.2M by and registered in the Patent Office of Bulgaria. Biodit will appeal.
This case raises the concern of whether the FSC has a methodology to make decisions regarding tech and innovative companies. Three weeks of sending questions and reminding them to answer so we have their position too, Trending Topics still haven’t received any comment from the institution.
In the meantime, after the prolonging of the procedure, which cost the company half a year delay for its expansion plan, and additional expenses for consultants, Biodit decided to raise venture capital. The first small part of the investment has already been transferred to the company last week, documents show. In the next weeks, Biodit will close the round, adding new investors.
Biodit, the biometry access control company, that was celebrated as the first startup to ever raise funding on the Bulgarian Stock Exchange received a voucher of €25K from the Ministry of Economy aimed to cover its costs for listing. The company, which currently has registered capital of €6.3M hoped to raise a bit over €1M to continue its market expansion in Europe.
Initially, the IPO was scheduled at the end of 2018. In September the startup even closed a pre-IPO round of €250K, led by local fund Impetus Capital. Besides Impetus and their €200K commitment, the company has another major investor – NEVEQ with €1.5 million.
Five months of silence (at least in the public space) after the prospectus was first filed to the commission, it rejected it. The voucher scheme of the Ministry of Economy would have been a pioneering project in Europe that aimed to support IPOs of young innovative ventures.
Global vision, local headquarters > local problems that stop that vision
Biodit’s product portfolio includes vehicle protection solutions, doors with biometric locks and more complex systems that allow access management and monitoring in production, hospitality and healthcare. The system allows the starting of the engine, only when the sensor detects an authorized fingerprint. The biometric fingerprint record is hexadecimal code that cannot be reproduced in any other order or copied, Sofroniev explained in an earlier conversation.
The company develops its own fingerprint capturing devices and a software product for its operation. In the segment of car security, the Bulgarian startup has already partnered with the major local insurance companies such as Armeec, Uniqa, Generali and Allianz.
Even though the majority of Biodit’s clients are now in Bulgaria, the company is planning expansion to Spain, the UK, and Scandinavia. Indeed, the startup already has its first clients in Spain, and the focus on the southern market is on hospitality. The first client there is NH Hotel Group that uses the company’s products to monitor personnel and guests’ behavior within the hotel as well as optimize electricity costs.