Invest Sofia Featured in the AI Report Bulgaria 2022 as Part of the Ecosystem Supporting AI

Invest Sofia has been featured in the annual edition of the AI Report Bulgaria 2022 by AI Cluster Bulgaria and SeeNews. The document covers areas such as Regulations and Strategic Frames, Trends and Challenges, Ethics of AI, Events, mapping of the ecosystem supporting AI, as well as key facts and figures from the state of the sector in Bulgaria between 2019-2022. Invest Sofia is listed in the mapping of local and state organizations supporting AI in Bulgaria, among the governmental and public ecosystem players along with Invest Bulgaria Agency, BSMEPA, Sofia Tech Park, Ministry of Innovation and Growth, Innovative Sofia, and more.

Quick facts from the analysis:

• – There is a clear increase in the number of companies interested in using AI to create innovative solutions that can positively impact Bulgarian society;
• – Bulgarian AI developers enjoyed significant revenue growth in the period 2019-2021. Their combined total revenue reached a record-high of 25.7 million in 2021, a jump of more than 35% from the amount in 2019. Compared to 2020, the sector reported EUR 3.8 million more revenue in 2021 than the previous year, representing a solid annual growth rate of 17.3%;
• – Operating revenue also grew, albeit at a slower rate of 17%, slightly accelerating from the 16% increase recorded in 2020. The impressive increase in the net sales revenue shows that Bulgaria-developed AI products and services are catching the eye of more and more customers and the market has promising potential for years to come;
• – Bulgarian entrepreneurs have a strong presence on the local AI scene, as 70% of the companies in the area are solely owned by Bulgarian individuals or companies. Another 10% of the companies are co-owned by Bulgarian and Dutch investors, with the aforementioned holding majority stakes in all cases;
• – There is an upward trend in the number of employed specialists in the field, a record-high annual growth rate of 25% was reached in 2020;
• – According to official data, in 2021 nearly 40% of those employed in the sector were engaged in research and development, up from 29% in 2020.

According to the report, some 60% of Bulgarian AI companies have used internal investments for their first AI project. One in five vendors has received financing through venture or private equity rounds.

The Bulgarian AI ecosystem is enhanced by a number of non-AI enterprises which are developing or using AI technologies to complement their main activities. These companies, ranging from small entities to local arms of multinational corporations, have a significant contribution to Bulgaria’s economy – their combined total revenue surpassed EUR 1.1 bln in 2021. Moreover, these companies come from a great variety of sectors, reflecting the widening need for AI-enhanced solutions across the national economy. It is hardly a surprise, however, that the bulk of companies that are not purely AI-focused but use such capabilities
are specialised in computer programming, consultancy and related activities, a sector which
has grown exponentially over the last decade, thus positioning Bulgaria among the leaders in the IT industry in Southeast Europe.

The leading five AI companies in terms of revenue accounted for 74% of the market’s total size in 2021. Their combined total revenue topped EUR 19 mln, representing an annual jump of 26% and a sharp acceleration from the 7.3% increase recorded in 2020. All of the top 5 companies reported a rise in total revenue in 2021, while annual growth rates ranged widely – from just 1% to the whopping 62%. Thus, the five leaders added almost EUR 4 mln more to the market’s total in 2021 in comparison to the previous year. Bulgarian AI companies stand their ground – 2021 was the third consecutive year with a profit booked and an increase in the bottom line, the report states.

The average net profit margin reached 5.2% in 2021, up from 4.7% in 2020 and 2% in 2019. Net profit per employee also improved, surpassing EUR 4,100 in 2021, after more than doubling in 2020 to over EUR 3,400.

If you are interested in more data and highlights from the report, you can register and download it for free form the website of the independent provider of business news and market intelligence for Southeast Europe – SeeNews.