top of page

3 key factors for the successful international expansion of Bulgarian startups and scaleups

Bulgaria in 2024 is completely different from Bulgaria before 1989, especially when it comes to individual freedom and economic development.


Formerly a single-party, socialist, totalitarian state with a planned economy and state-regulated business initiatives, Bulgaria is now a member of the European Union (EU) and NATO, and has a free-market economy and a vibrant technological and startup scene. A new generation of trailblazing entrepreneurs have built innovative businesses that have thrived at the national and international level. Their success has attracted the eyes of institutional investors and business angels, and has created exciting job opportunities for skilled professionals in various industries.


It is hardly surprising that more and more Bulgarian companies see international expansion as the logical next chapter of their story. To succeed in this endeavor, they certainly need a unique value proposition and a strong product/market fit, but this is not enough.


Below, we present three key factors that Bulgarian startups and scaleups need to take into account when planning their international expansion.


Can Bulgarian startups and scaleups expand internationally?


Before we look at the most important preconditions for successful international expansion for Bulgarian companies, we want to answer a question that might be circling around in your head: are there Bulgarian startups and scaleups with significant potential for growth beyond Bulgaria and even beyond Central and Eastern Europe (CEE) that have already expanded internationally?


Yes, there are such Bulgarian success stories in the making. Here are three examples.


Payhawk (Bulgaria/UK)


Payhawk offers an all-in payment and expense management software solution for larger small and medium-sized enterprises (SMEs) and enterprise customers, especially with a multinational footprint. Its platform makes finance teams’ job easier because they can manage their corporate cards, payments, invoices, and expenses using a single tool rather than multiple disconnected solutions.


Founded in 2018 by Hristo Borisov, Konstantin Dzhengozov, and Boyko Karadzhov, Payhawk gained international fame in 2022 when it became the first Bulgarian company with a valuation of USD 1 billion, joining the ranks of CEE unicorns. It started out of a shared office at Campus X, where it took advantage of our flexible office offerings, and has since raised USD 235 million Bulgarian and international venture capital (VC) funds. Today, the company has offices in Bulgaria, the UK, Germany, France, the Netherlands, Spain, Lithuania, and the USA, and its team, which is set to expand to 400 people this year, serves clients in more than 30 countries.


EnduroSat (Bulgaria/Luxembourg)


EnduroSat manufactures nanosatellites and offers shared-satellite services that enable public and private organizations to use space data for various purposes.


Since 2015, it has been on a mission to transform the satellite industry into a streamlined data service that gives organizations instant access to space data from sensors in the orbit. Founded by Bulgarian entrepreneur Raycho Raychev, who is also the creator of the international space education program Space Challenges, EnduroSat made its market debut in 2018 and has since then supported multiple customers and missions, and delivered over 2,500 satellite modules for customers’ satellites. Its core research and development (R&D) team is based in Bulgaria, but it also has offices in Germany, France, Italy, and the USA.


Given its highly specialized portfolio, EnduroSat is an example of a Bulgarian tech startup that has international expansion encoded in its DNA because the majority of its potential clients and partners are based outside of Bulgaria and the CEE region. Among the organizations EnduroSat has worked with are the National Aeronautics and Space Administration (NASA), the European Space Agency (ESA), Airbus, and Vyoma.


Dronamics (Bulgaria/UK)


Dronamics aspires to become the world’s first cargo drone airline that offers same-day delivery for everyone everywhere.


The company was founded by Bulgarian brothers Svilen and Konstantin Rangelov in 2014. Its remotely piloted cargo aircraft, The Black Swan, which, as of this writing, is the only aircraft of this type licensed to fly in the European Union (EU), can carry up to 350 kg at a distance of up to 2,500 km. Dronamics has raised USD 40 million in pre-Series A funding and has partner organizations in Greece, Malta, the UAE, and Qatar. It completed the first flight of its full-scale drone in Bulgaria in 2023, and it is planning to launch its commercial operations in Greece later this year.


Dronamics has a R&D and prototyping facility in Sofia and an airline operations team spread across several countries. It laid the foundations for its expansion at Campus X, where it set up its office in 2018, benefiting from a range of professional services, interactions with inspiring fellow entrepreneurs, investors, and mentors, and diverse networking opportunities.


3 key factors to take into account in relation to international expansion


Given the successful international expansion of Bulgarian startups and scaleups like Payhawk, EnduroSat, and Dronamics, among others, you are probably wondering what allowed them to expand their operations across Europe and beyond.


Having developed a product and/or a service that has the potential to transform entire industries and promises to solve one or more pain points of its target clients, the Bulgarian companies that have expanded internationally have also ticked the following three boxes:


·      they have assembled the right team for international expansion

·      they have selected the right location/s for their expansion

·      they have found the capital they need to fund their expansion


Building the right team for international expansion


Every company needs a core team that provides stability, continuity, and direction. However, as a business grows in terms of operations, sales, and market presence, it has to attract not just new talent but the right talent – that is, professionals with diverse expertise and experience who are capable of dealing with specific growth-related challenges while ensuring the organization remains on track to achieve its goals.


To ensure that they have a well-functioning team that can implement their expansion strategy in an optimal manner, startups and scaleups need to take the following steps or a combination of them that is suitable to their circumstances:


  • build an international growth team in charge of the expansion process

  • form an advisory council made up of professionals with a solid track record in building and managing businesses that can provide direction and course-correct when necessary

  • hire experienced country and/or product managers familiar with the specificities of the target market and customer base

  • work with lawyers and accountants responsible for all legal, administrative, and taxation matters in the target location so that the operations are in line with local regulations

  • attract marketing and communications professionals who can translate and localize the most important company content into the language/s spoken in the target market

  • choose an appropriate organizational structure so that all team members know who is responsible for what, who reports to whom, and how things are supposed to work on a day-to-day basis

  • conduct cultural sensitivity trainings to improve cross-cultural communication and limit the room for misunderstanding caused by cultural differences

  • invest in employee language learning programs


For example, Dronamics manages its international expansion through the company’s Executive, Talent, and People teams, says Hristina Dobrinovich, director of the People team.


The Executive team makes the strategic decisions and provides oversight, the Talent team is in charge of hiring-related tasks, and the People team is responsible for the onboarding of new team members and the adaptation of internal processes to ensure effective communication and smooth daily operations in line with local administrative and legislative rules. According to Hristina, the key to successful international expansion is taking care of the basics and being flexible.


Regarding the changes in the profile of the talent that Dronamics strives to hire as it expands, Hristina says that while the company used to hire less experienced people who were ready to grow with the company, it now focuses on attracting professionals with extensive expertise and, depending on the position, substantial managerial experience in similar corporate settings. They should also share the company’s values and commitment to innovation and safety, and demonstrate strong willingness to grow together with their colleagues.


Choosing the right location for your business


When a company considers international expansion, it needs to decide whether it is going to do it through the acquisition of an existing business or by building its operations in another location from scratch. In both cases, however, it has to think carefully about the goals it hopes to achieve by expanding its presence so that it can pick a location that increases its chances of success.


Bulgarian startups and scaleups would do well to select a location for their business that meets most of the following criteria:


  • it gives access to a sizable market and/or a wide network of potential partners/investors

  • it offers conditions that correspond to the company’s needs and goals - for example, a sales office would have different needs and goals compared with an R&D hub in terms of infrastructure, personnel, administration, and expected results

  • it boasts state-of-the-art IT infrastructure and security

  • it offers a business-friendly environment with mechanisms in place that protect the rule of law without increasing the cost of operations because of stifling bureaucracy

  • it is easily accessible and connected to other major cities within and outside the country

  • it can serve as a springboard for subsequent expansion in adjacent markets


Going back to Dronamics, Hristina explains that when considering potential new locations, the company takes into account its mid-term strategic goals, market demand, and the level of support it can expect to receive from local institutions and business partners.


Funding your international expansion


In contrast to the early stage of Bulgaria’s transition to democracy and free-market economy in the 1990s, when local entrepreneurs had no other option to fund their businesses but to bootstrap them, Bulgarian startups and scaleups today can attract funding from VC funds, business angels, and national and EU programs.


Among the most prominent players in the Bulgarian VC market are:


  • Eleven – an early-stage VC investing in technology companies in the CEE region, such as Payhawk, Dronamics, SMSBump, Gtmhub, NitroPack, eBag, and Enhancv

  • LAUNCHub – an early-stage VC investing in startups in Central and Southeast Europe with a portfolio including OfficeRnD, Quantive, FintechOS, FindMeCure, Colossyan, and Giraffe360, among other companies

  • Vitosha Venture Partners – a VC investing between EUR 25,000 and EUR 1 million in early-stage and growth stage companies that are based or connected to Bulgaria, such as CloudCart, Fabrico, 365 Company, Hobo, Petmall, and VibeJobs.

  • BrightCap Ventures – an early-stage VC with investments in technology companies such as LucidLink, Software Group, Scaleflex, Vedamo, and Peruse

  • BlackPeak Capital – a private equity co-investment fund focused on investing growth equity in fast-growing companies in Southeast Europe, such as Telelink, euShipments, Walltopia, and Verdino  

  • Impetus Capital – a seed and Series A VC specialized in private equity whose portfolio includes companies like Boleron, Discordia, Allterco, and BIODIT


In addition to Bulgarian VC funds, some of the most successful startups and scaleups based in or connected to Bulgaria have raised considerable funding from international VC funds such as Lightspeed Venture Partners, Brighton Park Capital, HubSpot Ventures, Endeavor Catalyst, Freigeist Capital, and Speedinvest. This track record opens up potential funding opportunities for other innovative Bulgarian ventures in the future thanks to the visibility and network effects.


Such opportunities may also come through business-oriented nongovernmental organizations like the Bulgarian Private Equity and Venture Capital Association (BVCA), the Bulgarian Entrepreneurial Association (BESCO), and Endeavor Bulgaria, as well as startup accelerators such as Bulgaria Innovation Hub’s Growth Accelerator Programme and Endeavor Bulgaria’s Dare2Scale programme.


Another source of financial and other support for SMEs is the Fund Manager of Financial Instruments in Bulgaria (FMFIB) – a Fund of Funds (FoF) that allocates targeted public funds from EU programmes and national co-financing via special financing schemes. In February, it announced that it has become a full member of Invest Europe – the leading European association of organizations, fund managers, and institutions related to equity investments and private capital.


Using Dronamics as an example once again, the pre-Series A funding of USD 40 million the company has raised includes investments from Bulgarian and international VC funds and angel investors. About USD 3.2 million of this funding came from an initial public offering (IPO) of Dronamics Capital, a shareholder in Dronamics Global, on the SME growth market of the Bulgarian Stock Exchange (BSE) in 2021. In addition, Dronamics has received EUR 12.5 million from the European Innovation Council (EIC) in the form of an equity investment and a grant.


Campus X as a springboard to international expansion


At this point, two things should be obvious for you.


First, a growing number of Bulgarian companies are proving that local startups and scaleups are capable of expanding their operations beyond the country and even the CEE region.


And secondly, while the recipe for international expansion will vary from company to company depending on the industry and the organization’s strategic goals, it should contain a unique value proposition and a strong product/market fit, as well as the right team, the right location/s, and access to capital.


As an end-to-end ecosystem for collaboration-oriented entrepreneurs and innovators, Campus X serves as a springboard to international expansion from Sofia, Bulgaria. How? By providing everything young, growth-stage, and established businesses need under one roof.


If you want to learn more about Campus X, check out our private and shared offices and the wide range of professional services we offer to our members, or simply contact us.


bottom of page