The Tech Sector Is the Most Rapidly Developing Industry in Sofia, Invest Sofia with Further Steps in Support to Local Companies

The technology sector has tripled growth in recent years and currently is the most rapidly developing sector in Sofia. The country shows promising signs to become leader in SEE due to several local strengths, including strong institutional support toward access to funding mechanisms and know-how. For example, in Bulgaria there are 17 private equity and venture capital funds, as well as incubator / accelerator programmes, covering all stages of the business life-cycle.

These are some of the key findings of a study by the global entrepreneurial network Endeavor, which examines the Sofia’s tech sector and snapshots the main challenges and opportunities for its development.

The study was funded by Invest Sofia, the Fund of Funds, the Bulgarian Development Bank and was supported by BESCO.

Tech entrepreneurs give an extremely positive assessment of the development of the sector in Sofia. Nearly 96% of them state that they have positive expectations for the future of the sector in the capital. Along with established fintech and outsourcing companies, Sofia has been chosen by companies that develop cloud and blockchain technologies. At the presentation of the study, Minister of Innovation and Growth Daniel Lorer said that there is no doubt that innovation is the most powerful engine for growth in the country. He stressed the importance of active and useful dialogue between institutions and business representatives.

“As a city with a strong focus in the tech industry, we are working to further help, support and maintain a friendly business environment. That is why we established the municipal investment agency Invest Sofia. Together with the team of the Agency, we have developed several instruments aimed to support both large companies and smaller start-up companies”, Mayor Yordanka Fandakova said.

“Recently, the Invest Sofia Agency presented its new service called “Green Card for administrative services”. Soon, we plan to launch yet another initiative for start-up companies, that aims to challenge them to find smart solutions related to urban issues. The results from such direct assignments will be useful not only for Sofia Municipality and the municipal companies but also for the young companies”, Invest Sofia CEO Dr. Maria Christova said.

According to Endeavor’s study, Bulgaria has a chance to position itself as a pillar of innovation in Southeast Europe. Its good positioning is due to several local strengths, including a strong ecosystem, well-functioning structures, and strong founder-to-founder connectivity. “A very important factor is the consistent policy of Sofia Municipality since 2015, when the Strategy for Smart Specialization of Sofia was developed,” Dr. Hristova said.

“Entrepreneurship in tech has the potential to be the engine of accelerated economic growth in our country, and the strong entrepreneurial ecosystem built in recent years can play a leading role in Southeast Europe. Targeted efforts and enhanced partnership between the state and the private sector are needed to define a clear strategy, policies and tools to support the development of this “new economy”, Momchil Vassilev, CEO of Endeavor Bulgaria, said.

Bulgaria and Sofia have one of the lowest levels of youth unemployment, which is a good indicator of socio-economic stability. According to the report “Global Competitiveness Index” of the World Economic Forum (WEF), Bulgaria ranks 49th in the world and ahead of all countries in the region, except Slovenia. Bulgaria is a member of the European Union, which provides opportunities for the country’s integration with the most advanced economies in the world. Based on that research, there is a growing number of start-up companies in Sofia, which have already passed their early stage of development and have already tested and launched on the market products. This is yet another prerequisite for the country’s positioning as a regional hub. The main challenge identified by the companies participating in the survey is the shortage of labour.