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Angel Angelov
Dec 22, 20214 min read

Portfolio review '21

Updated: Dec 23, 2021

End of 2021 Portfolio Review


A little longer than a year – this is how long Innovation Capital has been signing deals. During this time, we have signed investment agreements with 74 companies with 8 more on their way in the next couple of weeks, for a grand total of 82. Those companies come from various sectors of the economy, they have various business models, and the size of the investments also varies – from EUR 25 000 all the way up to EUR 950 000.


Let’s dive into the totals and averages first. Total investments Innovation Capital has made amount to EUR 8.2mln with the mean investment being EUR 100k. Of course, our main goal is to invest in pre-seed and acceleration-stage companies, hence a median ticket of EUR 50k. Out of 82 investments, 68 are in the range EUR 25k – EUR 50k.


Figure 1


Obviously, summary statistics can only give us so much information. To get a better overview of our portfolio, one needs to look at the sectors the portfolio companies come from. We have invested in over 10 sectors of the economy with the most prolific one being Enterprise Software with 14 investments worth a total of EUR 2.4mln (look at Figure 1). This is 17% (look at Figure 2) of our portfolio in terms of number of companies and close to 29% in terms of investment amount showing that they have managed to punch above their weight when attracting investments. Other sectors related to technology that have attracted significant investment are: Robotics / AI (10 companies for a total of EUR 650k in investments); and Entertainment / Gaming / eSports (9 companies for a total of EUR 300k in investments). Other sectors we are keen on are FMCG sector, traditionally strong in Bulgaria, with 10 investments for EUR 1mln and Fintech with 6 companies for a total of EUR 825k. If our portfolio was a microcosm of Bulgarian businesses, we dare say ours would be a very agile, dynamic, and competitive economy - a veritable tiger in the EU!


Figure 2


Since VC funds are still a relative novelty in Bulgaria, we often face scepticism and doubts that we would snatch a company away from its founders. But fun fact, no! On average, our median stake in portfolio companies is 10%. And for those who do not feel comfortable giving away a share so early, we have other options such as convertible loans and buyback options.

But let’s also look at the business models our portfolio members employ. Of course, there are a myriad business models, which are sometimes difficult to pinpoint, and often companies have more than one model, so we had to do a bit of simplification. The business model employed by the highest number of companies is B2B – with 57% of our portfolio, or 44 companies (Figure 3), adhering to this model. Second is B2C with 26 companies. Bulgarian entrepreneurs also have a penchant for marketplace platforms because we have a whopping 8 in our portfolio.


Figure 3

Our investment strategy has evolved since our first investment last year and we now refined a few investment scenarios which appeal to our focus and funding mandate:


Acceleration/Pre-Seed – pre-revenue stage

  • XLRadar – companies that go through our accelerator – thematic industry batches with heavy added value to the participants – the finalists get fixed term sheets up-front and an independent jury decides which startup gets funded

  • Spray and pray – despite its mocking connotation, we are firm believers that a few winners will make up for the losers – most of the companies in this compartment are highly risky with higher valuations and thus with expectations for maximum return (5-10x)

  • Startup Studio – heavy involvement of resources and management advisory

  • Brick & Mortar - low-risk traditional business models with easy path to breakeven

Seed – post-revenue stage

  • 10x superstars – highly scalable companies with a strong innovative case with unpumped valuations at a stage where product-market fit is already covered; usually a co-investor would be required

  • In cash we trust – more traditional business models, close to breakeven with potential to grow at a steady linear pace


So far we earned the trust of 100+ founders and created close to 200 jobs as well as the trust of 10+ co-investors and we are just starting counting. We co-invested with Eleven, CEO Angels Club, Vitosha Venture Partners, Zarian Capital, Overkill, a number of business angels and we are looking to join forces with other partners next year. We are proud of our portfolio and would like to note a few companies to be on your radar in 2022:

Take a look at the rest of them on our Portfolio page. Ping us if you need an intro to any of the founders in the portfolio. Happy holidays and keep us posted with your new venture ideas!

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