Introductory Overview of PropTech in Bulgaria

1. Approximately how many PropTech companies are active in Bulgaria?

The first National survey on Bulgarian digital small and medium sized companies (SMEs) classified to some extent digital companies in sub-sectors as EdTechs, BioTechs, FinTechs, etc. However, there were not companies in their sample which classified as PropTechs or ConTechs.[1] The latest research published in 2018 didn’t mention any either.[2]

On the one hand, this is due to some specifics of the Bulgarian IT industry which has recognized the high potential of the sub-sector solutions only in recent years, and startups offering such ‘hybrid’ solutions are more of an exception rather than the rule in itself. These will definitely change with instruments like the PrEXCELerator which fosters hybrid digital solutions across 15 industries and 13+ technologies.

 2. How many VCs are investing or interested in PropTech in Bulgaria? List the top 5 (including accelerator programs)?

Pre-seed and seed stage: Eleven Ventures. The VC has a large focus but predominantly on digital solutions.

Growth stage: Rosslyn Capital. The VC focuses on investing in solutions in Manufacturing, Telecommunication, IT, Real Estate, Renewable Resources.

3. Which Real Estate companies are adopting proptech solutions the most?

We can categorize real estate clients in different groups.

Closely following the 2018 economic downturn which provoked the overwhelming rise in bad debts for real estate properties affected banks in not-so-much expected way. In a very short time they turned up the sole owners of a huge number of real estate properties. Managing them was neither in their primary scope of activities, nor in their expertise. Their major goal was to get rid of these assets as soon as possible, but it was not that easily considering the overall state of the economy. Consequently, at least for the interim period of owning these assets, they had to be managed properly. This was the time when the solution of bilid helped many banks to meet the challenge.

Another group includes large office spaces. The rise in the ICT industry in Bulgaria logically advanced the demand for Class A office spaces[3], and these have to be managed in a completely different fashion. It comes as no surprise that most clients of bilid fall in either of the two categories.

Yet, there is a third category which comes again into the limelight with the economic recovery, namely, large shopping centres.

4. What are the top 5 most successful proptech solutions from Bulgaria?

Presently, there are proptech solutions successful in the Bulgarian market. One major reason being that the market is at a nascent stage of its development. Coming amidst the most thriving examples of a proptech solutions is bilid which we present below in more details.

5. Are Universities or High Schools in Bulgaria accommodating PropTech on the curriculum?

There are 2 Universities which offer Real Estate Management Degrees. However, there is only one University, namely University of Civil Engineering and Construction – Sofia,which offers a Master degree in ‘Software Technologies in Construction’. Furthermore, other degrees at the same University include studies on Smart IoT solutions, thus enlarging the scope of studies on digital technologies in the construction processes.

6. How do proptech professionals in Bulgaria communicate? Is there a forum or an app you use?

By the admission of Georgi Totev, Managing Partner of Alpha Struct Ltd and an alumnus of 2018 PropTech Preaccelerator, there is still no communication network for PropTech companies in Bulgaria. He adds, ‘Such a network is central to the companies in their pursuit for reaching high efficiency and detecting the right-size solutions for their clients. It is mandatory to have a medium which will foster the interactions among professionals operating in all diverse sectors related to the construction industry. The obvious aim is to close the cycle of ‘Investing – Structural Engineering – Real Estate management and Facility Management’.

7. Are there any government initiatives supporting innovation in real estate?

Yes, there are. One is the Fund for Sustainable Cities which funds projects ‘that contribute to the sustainable regional, economic and social development on the territory of Sofia and Southern Bulgaria.’ The fund’s resource amounts to BGN 342.27 million.[4]

According to Stamen Krivoshiev, an EU Funding Expert, there is another funding source, namely ‘Innovation and Competitiveness’ Operating Program. There are 2 possible ways to apply for funding. One is in line with ‘Improving Manufacturing Capacity of SMEs’. The second one is ‘Fostering Entrepreneurship’. Both sub-programs highly favour knowledge-intensive services, and PropTech solutions are within their immediate reach.

8. Which are top 5 emerging companies to watch out for in your region?

There are 2 companies which operate in the PropTech sector and optimize the interaction of Real Estate Management with Finance Management on one side, and on the other, Real Estate Management and Construction. Bilid offers a software solution which manages most internal and external corporate processes within the former area of interaction. Cobuilder International Ltd. manages processes within the latter area. Orak Engineering offers a digitized solution for parking lots management and control. However, it is a secondary product in its portfolio.

There are many more companies which offer services in the Real Estate, Facility Management, or Project Management areas. However, none but these two offer digitalized solutions that imply such services.

Bilid is Bulgarian company, and Cobuilder International Ltd. entered the Bulgarian market 4 years ago. Common to both companies is that they offer a solution applying software technology.

Referring back to Question 1 above, I’d like to quote a recent classification of Bulgarian companies in the IT industry. It is a bit amateurbecause of a number of consideration flaws. One is classifying Cobuilder in the Industry Software group. A second feature is the obvious absence of a PropTech category. Such a classification speaks for a low popularity and awareness of PropTech solutions and what they mean.[5]

Even so, many other PropTech and ConTech startup companies are being established as a natural result from the first PropTech & ConTech Startup Praccelerator in Bulgaria. Five PropTech and ConTech startups were settled following the first edition of the Preaccelerator in 2018. Just 7 months following its end in June 2018, 3 of the startups are fully operating startup companies, and one negotiates with a UK-based PropTech accelerator. 2019 edition of the Preaccelerator (PrEXCELerator) will start in May, and will surely raise even more PropTechs.

[1] You can access the full report here

[2] You can access 2018 Innovationship Bulgaria Report here

[3] For more information on the trend, check out these article published in ‘IT and outsourcing companies drive 70 % of office space deals’. You can access it here

[4] For more information, please check out ‘Funding Opportunities’ article published by Sofia Investment Agency here

[5] The Bulgarian IT Ecosystem: Who is who in 10 words

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