“I believe the Bulgarian Startup and VC ecosystem is one of the most developed ones in the region.” Interview with Zlatolina Mukova from New Vision 3

Throughout 2023, New Vision 3 was one of the most active VC funds across the CEE region. With nearly a dozen investment rounds announced only in Autumn of the year, namely investments in Prolaz and 7 Bulgarian startups, NV3 continues uplifting the local startup ecosystem with much needed capital.

AIN had the opportunity to interview Zlatolina Mukova, Managing Partner at New Vision 3, discussing the fund’s activities in 2023 and plans for 2024, as well as talking about the CEE and Bulgarian markets.

Zlatolina Mukova from New Vision 3
Zlatolina Mukova. Image: NV3

Tell us about New Vision 3.

New Vision 3, as you might guess from the name, is founded by veterans in the VC industry in Bulgaria. Myself, a team manager at the Bulgarian Post-privatization fund back in 1999, joined by Konstantin Petrov, a start-up founder at investee company at that time, and both of us partners at Neveq1 ( 2007 ) and Neveq2 (2012) funds, Jordan Zarev  and Alexander Terziyski, investment professionals at Neveq2, and Jordan Stoyanov and Filip Genov, bringing solid banking VC experience from the largest Bulgarian bank. NV3 operates from Sofia, Bulgaria, and invests in fast-growing tech companies, which aspire for the leading position in their domains on the local and/or global markets. 

NV3 invests in early-stage technology companies in fintech, AI, blockchain, shared economy, e-commerce tech, green energy, frontier tech. To 100 years of joint experience in venture capital, €50 million investments in local start-ups, three VC funds, over €50 million co-investments, the team adds a success record of 7 exits to multinational players, mostly listed on the West European and US stock exchanges. The fund manager is a proven partner of visionary entrepreneurs creating new global technology solutions and business models from East Europe. 

NV3 fund commitments amount to €22.3 million, where the leading co-investor is the Fund of Funds in Bulgaria with a commitment of €19.1 million provided by the operational program Innovation and Competitiveness 2014 – 2020, co-financed by the European Structural and Investment Funds.

2023 seemed like quite a busy year for NV3, with nearly a dozen new investments announced only in Autumn. What is the exact number of closed deals in 2023, and how did you manage to do it?

We invested in 18 companies in 2023, which was the last year of our investment period. But the preparation of the deal pipeline started in previous years. And most of the deals come from our network of contacts. As we are so long on the market we are very well connected, moreover some of the founders from our previous funds are already investors themselves bringing a lot of contacts, but also knowledge in the tech space which helps to validate the hypothesis of candidates for investment. Our rich experience also helps to close deals faster.

Can you tell us more about the recently announced Autumn batch of 7 startups?

  • QuarkXR is a company we have been following for a few years. It develops a Next Gen compression and streaming Technology, an ultra-fast software solution that provides low-latency wireless transmission.
  • CoLumbo reads spine MRI scans better and faster than humans. The software has a CE mark, FDA 510(K), and TGA clearance. The key novelty of CoLumbo lies in the unique machine learning algorithm, based on fully convolutional neural networks combined with medical domain knowledge. Health tech is one of our target sectors and we are very happy to have been able to invest in such a promising company.
  • 365 Data Science provides a holistic data science and AI training, including the technical expertise and soft skills needed to ensure long-term success in a dynamic job market. Its courses and projects are based on real-life use cases people can expect when they get hired. Job candidates can verify their data and AI skills with industry-recognized certificates and get a desired job.
  • AdScout is an ecommerce tech company that builds a network of trusted recommendations, connecting satisfied users with popular brands. This is our second investment in this sector, and we believe it will be a game changer in the way people make buying decisions.
  • Vibejobs is a job platform in Viber that enables companies to find and attract Blue-Collar Workers utilising a chatbot-based solution for communication and recruitment automation. The platform is making digital hiring accessible to all people looking for jobs which are currently underserved.
  • Bronia is a deep tech company specialized in next-gen intelligent & autonomous security solutions. Its AI-based acoustics signal processing platform leverages state-of-the-art proprietary technology to identify sounds of interest, locate their sources and act smartly across a variety of industry and security scenarios.
  • eLando is a professional services company that provides innovative technology solutions using top notch delivery methodologies. The high level of technical expertise, complemented by break-through thinking and creativity are the key to their success.

What usually makes you think “We need to invest in this startup”?

It’s a difficult question, but I would say we are not making emotional investments. We are analyzing every aspect of the business – market, product, team – before making any decision.

From your experience, can you tell us what differentiates Bulgarian startups from others in Europe?

I wouldn’t say there is much difference especially with the ones in Eastern Europe. Compared to Western European ones the difference is, surely, the lower amount of available capital, as well as weaker connections with the large markets in the EU and the US. Thus, startup founders in the region more frequently resort to bootstrapping strategies compared to their western counterparts.

Can you walk us through the specifics of the Bulgarian Startup and VC ecosystem? How is the ecosystem faring recently?

I believe the Bulgarian startup and VC ecosystem is one of the most developed ones in the region. Important driver for this development was the specialization of Bulgaria in the IT sector in the socialist past. Then, the successful programmes of the European Investment Fund aiming at building of professional fund managers and attracting private capital alongside EIF. Despite the overall VC funding downtrend, the ecosystem is faring quite well in Bulgaria.

Are there any notable changes between the ecosystem in 2019, when you started, and now?

NV3 started in 2019 together with a bunch of other VC funds targeting companies from the seed to growth stage. As of today, all 2019 vintage funds are beyond their investment period and one can feel the lack of capital on the market. Nevertheless, the Fund of Funds and the EIF are in the process of selection of fund managers for new funds and we hope they will be operational early next year at the latest. It is still very difficult to raise funds in Bulgaria without those two important players.

As regards investment proposals, we are evidencing a larger number of quality deep tech projects.

What are your general predictions on the market in 2024?

The market is recovering from the 2022 capital crisis. Still, the recovery is not as fast as we would like it to be. No doubt, AI will continue to be a bright spot for investors.

Can you share some of your plans for the future?

As you know, VC fund managers are in the startup mode themselves. Thus, our team is also looking into raising its next fund.