If you want to invest in fintech, you might want to consider Sofia. The Bulgarian capital is one of the growing fintech destinations in the CEE Region, says the newest CEE Fintech Atlas by the Raiffeisen Bank International (RBI).
Startups and more established companies offering financial and technological services in Bulgaria are already reaching critical mass. With its attracted external investment of €18,9M Cash Credit is the best-funded fintech company in the country, according to the RBI Fintech Atlas. The recently released report shows the development of the fintech sector between 2008 and 2018. Software Group, which develops software for microfinancing institutions, with an investment of €5,2M lands on the second position (recently the company received another €18M in form of venture debt). The peer to peer platform Klear ranks third (€2,8M of funding).
Development at a fast pace
„GDP and average income don’t determine the digital progress in the financial industry,“ says Maximilian Schausberger, Head of the Accelerator Program Elevator Lab during the presentation of CEE Fintech Atlas. Bulgarians GDP in 2018 counts €55.2B.
One of the reasons for the rapid development of digital technologies in Bulgaria is the fast internet. The country ranks second worldwide after South Korea by the speed of the broadband internet. Moreover, according to the Global Innovation Index 2017, Bulgaria is also the world’s second most innovative upper-middle income country and number one in the SEE Region in terms of innovation efficiency and achievement.
The Bulgarian fintech market used to follow the lead of larger CEE countries but is now catching up very quickly. Mostly thanks to the development of digital payments – the have the largest share of the market and will continue growing. A growth of 21% is expected in 2019, the report states. The most promising services include mobile payments, peer-to-peer payments and lending and digital commerce transactions.
The ecosystem effect
For the second year in a row, Raiffeisen Bank International runs its Elevator Lab Challenge, a contest for fintech startups in Bulgaria. The two national winners are already in PoC phase with the local branch. Indeed, the fintech ecosystem has been developing well in the past years bringing established players, startups, funds and banks together.
The two most prominent seed-stage VC funds from Bulgaria, whose role is to finance startups and innovative SMEs, are Elven Ventures ( according to the 2017 European Accelerator Report, is one of Europe’s top ten investing accelerators and venture funds) and LAUNCHub. Both VCs are active in the fintech sector with Eleven recently closing a partnership for corporate acceleration with payment network VISA. The first VC in Bulgari – NEVEQ, has recently closed its third fund and also has a special focus on financial technologies.
According to Unicredit Bulbank’s report last year Bulgaria ranks first in Southeastern Europe and third in CEE by the number of fintech companies. The dynamic development of the fintech sector led to the recent creation of the Bulgarian Fintech Association. This non-profit organization brings together the country’s leading fintech companies and aims to provide all parties in Bulgaria interested in fintech with a platform for communication and exchange.
RBI’s Atlas that provides insights about 19 fintech ecosystems in CEE and could be downloaded here.