By New Vision 3 Fund
Introduction: A Pivotal Year for Bulgarian Venture Capital
2024 was a defining year for Bulgaria’s startup ecosystem. While innovation remained strong, a lack of fresh capital created significant challenges for early-stage ventures. Many promising startups had to turn to angel investors, foreign VCs, or alternative funding sources to sustain growth.
As one of Bulgaria's most active venture funds, New Vision 3 (NV3) Fund has been at the forefront of these developments. With a portfolio of 38 companies spanning fintech, AI, deep tech, SaaS, and cloud solutions, we continued to support our founders through this difficult period, providing follow-on capital and strategic guidance. In this article, we reflect on key lessons from 2024 and identify opportunities that will shape the Bulgarian startup ecosystem in 2025.
Funding Gap: The Impact of Delayed Institutional Capital
One of the most pressing issues in 2024 was the delayed allocation of institutional capital from the Fund of Funds (FoF) and the European Investment Fund (EIF). These delays left a significant funding gap for early-stage startups who relied on these locations to scale. Furthermore, many local startups in the Series A stage struggled to secure follow-on investments.
How Startups Adapted
Despite the funding challenges of 2024, Bulgarian startups demonstrated resilience by exploring alternative financing strategies.Â
With local VC funding scarce, angel investment networks became more active, as angel syndicates and early-stage investors stepped up to bridge the gap.Â
At the same time, startups with strong traction and scalable business models turned to international VCs, particularly from CEE, DACH, and the UK. However, many foreign investors preferred to co-invest alongside local funds, which proved difficult due to the shortage of active Bulgarian investors.Â
As a result, startups were pushed to rethink their financial strategies, prioritizing unit economics, cost efficiency, and revenue growth over continuous fundraising. This shift toward financial discipline not only helped companies survive but also strengthened their long-term sustainability in an increasingly competitive landscape.
The Impact for NV3
While these challenges affected the broader market, NV3 remained focused on supporting its existing portfolio. Unlike emerging funds still raising capital, NV3’s investment mandate was already deployed, allowing us to prioritize follow-on funding for our top-performing companies rather than sourcing new deals.
NV3’s Investment Activity & Portfolio Highlights
Despite the market turbulence of 2024, NV3’s portfolio companies showcased resilience, innovation, and strong growth. Throughout the year, we remained committed to supporting high-performing ventures by providing follow-on funding, ensuring they could sustain momentum despite broader capital constraints.Â
Several portfolio companies made significant strides, securing strategic partnerships and earning international recognition.Â
Paynetics continued to expand its embedded finance capabilities, earning a spot as a finalist at The Card & Payments Awards. Bronia AI positioned itself as a leader in AI-driven acoustic security solutions, while SWIPE scaled its presence in the refurbished smartphone market, further cementing its position in the circular economy. FinBiz and Klear collaboratively launched a new lending solution for small businesses. Additionally, NV3 played a critical role in attracting external investors to companies like MYX and CloudCart, validating their global potential and strengthening their long-term growth prospects.Â
As we look ahead, our focus remains on guiding our founders toward capital efficiency, international expansion, and access to strategic investors to drive continued success.
Looking Ahead: Opportunities in 2025
While 2024 posed significant funding challenges, the year ahead presents promising opportunities for Bulgarian startups. The long-anticipated return of institutional capital is expected as the Fund of Funds and the EIF started announcing the new fund managers. This will inject much-needed funding into the ecosystem, with a likely focus on growth-stage investments and sector-specific financing, particularly in fintech, AI, and deep tech.
At the same time, international investor interest in the region continues to grow. The funding gap in 2024 pushed many startups to build relationships with foreign VCs, a trend that will likely accelerate. Central and Eastern Europe remains an attractive market for investors from DACH, the UK, and the US, offering high-growth potential at competitive valuations.
Deep tech and AI will also emerge as dominant investment themes, with sectors like AI-driven security, embedded finance, and generative AI solutions gaining traction. As EU regulations around AI and cybersecurity take shape, startups that integrate compliance into their AI-driven offerings will be well-positioned to stand out.
Beyond traditional venture capital, alternative funding models are set to gain momentum. Corporate VC activity, revenue-based financing, and lending solutions like those pioneered by FinBiz will provide startups with more flexible funding avenues. Additionally, strategic partnerships with established corporations will create new opportunities for growth outside the conventional VC landscape.
To navigate this evolving environment, startups should focus on strong unit economics and sustainable growth models. Engaging with international VCs early will enhance fundraising prospects, while exploring alternative funding sources—such as corporate-backed investments and non-dilutive financing—can provide additional stability and expansion opportunities.
Could 2025 Be the Year of Resilience & Growth?
Bulgaria’s startup ecosystem has demonstrated remarkable resilience, and 2025 presents a crucial opportunity to turn challenges into growth. As alternative financing options gain traction—from corporate VC and revenue-based financing to strategic partnerships—startups must embrace financial discipline, adaptability, and long-term planning.
At NV3, we remain committed to supporting our portfolio companies and the broader ecosystem—not just with capital, but with strategic guidance, hands-on expertise, and access to a global network of investors and industry leaders.
For startups and investors looking to navigate the shifting venture landscape, now is the time to refine growth strategies, strengthen financial sustainability, and position for long-term success. The next wave of innovation is on the horizon—those who adapt quickly will be the ones leading it.