MFG Invest (BUL:MFG) invests in start-up and scale-up companies whose activity is in the field of fintech services, e-commerce, creation and sale of technologies that have applications in various business areas such as, but not limited to, education, agriculture, security, storage of data and more. MFG Invest does not invest in companies that are at the “idea” stage and do not have a developed product or permanent team. The purpose of the company is to manage its equity portfolio by supporting the development of the companies in it through sharing the long-term experience and expertise of MFGI team members. The company is traded on the beam market of the Bulgarian Stock Exchange since the beginning of 2023.
MFG Invest is part of the MFG group. MFG is a 100% Bulgarian group of companies whose mission is to provide easy access to financing for everyone, regardless of their current social and financial situation. The group is active in Bulgaria, Romania, Ukraine, Poland, North Macedonia, Spain and Croatia, and plans large-scale geo-expansion in key European and international markets such as Germany, Mexico, USA and India. The MFG Group is a responsible employer of more than 8,300 people in more than 450 offices in the countries in which it operates.
MFG’s main focus is offering financial products for individuals and small and medium-sized businesses. The companies in the group have active registrations and licenses for lending, credit intermediation, postal money transfers, payment services and issuance of electronic money, general insurance, which have been issued by the relevant supervisory authorities. The group’s portfolio includes companies and brands such as Easy Credit, Biala Karta, Viva Credit, Fintrade, ACOD, iuvo, NewPay, Instinct Insurance, etc.
Stanimir Vassilev is an entrepreneur and investor and co-founder of MFG Invest. Together with Nedelcho Spasov, he is the co-founder of the first company from the MFG Group Easy Asset Management. This happened way back in 2005, as the idea of the founders was to offer an alternative and simplified, innovative for its time, access to financing to users (initially only in Bulgaria, and over the years the successful business model was applied in Ukraine, Poland, Romania, Spain, North Macedonia). This business model works successfully to this day, and over the years it has been upgraded and supplemented. Stanimir Vasilev studied strategic management in INSEAD University, Singapore, and holds a master’s degree in finance from the University of National and World Economy and a master’s degree in engineering from Sofia Technical University.
Ina Ilieva is a legal expert and business start-up expert. She has been the Legal Services director of MFG Invest since its establishment until now. Ina is a lawyer with over 15 years of experience in civil, commercial and bond law. Her law degree is from Sofia University “St. Kliment Ohridski”. Ina has been part of the MFG group for 10 years, having held various management positions: Director of Legal Department, Director of Legal Department and Corporate Relations and Director of European Markets. In addition to being a lawyer, Ina has experience in leading projects, launching and managing operations in foreign markets, as well as managing people and building new teams.
Simeon Iliev co-founded his first online business in 2008 as a student at TUES. He studied international economic relations at University of National and World Economy and engaged in online marketing as a freelancer. For five years he managed projects at Kantar for Fortune Global 500 clients, and for the past two years he has been working on investment projects and evaluation of potential startups at MFG Invest.
Following the IPO in late 2022, how big is your investment portfolio now and what are your expectations for its size by the end of the year and in 2024?
Ina Ilieva: As of June 30, 2023, the value of our portfolio is nearly 23 million euros or almost 45 million Bulgarian leva. At the time of listing on BEAM almost a year ago, our portfolio was nearly 21 million euros or 41 million leva. This represents an increase of 4 million leva. The primary reason for this increase is the new investments we’ve made. During the first six months of 2023, we used the capital raised from the BEAM market, amounting to 4,039,154 leva, for the core activities of the company, namely equity investments in startup companies. In total, the company has made 17 investments, with six of them being carried out after our listing on the BEAM market, between December 2022 and the end of June 2023. Our new investments are in the following companies: Ondo, Hydrogenera, FindMeCure, Native Spaces, StarForge, and Canopy. We also made a follow-up investment in Tiger Technology.
Simeon Iliev: By the end of the year, we will certainly conclude two new investments that we are currently preparing and have not yet announced. While it is possible that we may make more investments, at the moment, we haven’t made any other investment decisions. In 2024, our goal is to make a minimum of five or six new investments. It is also possible that our portfolio may grow as a result of higher valuations and positive developments in the companies we have already invested in. Of course, we do not rule out the possibility of negative effects in case of lower valuations or negative developments in companies.
What kind of companies is MFG Invest investing in?
Stanimir Vassilev: MFG Invest is a company that invests in the early stages of a company’s development, typically during pre-seed and seed funding rounds. At this stage, companies have already developed a product ready for the market or are already offering it, but they still have relatively few customers. The most important criterion we consider is the team, especially the founders of the company. We assess their experience and competencies, as well as their full dedication to the company. We also evaluate the business model, its competitive advantages, the founders’ market entry strategy, and the potential for the business to scale internationally.
We make an effort to understand in depth the company’s product and its customer base. Subsequently, we assess whether there is competition for this product on a global and regional scale. If we determine that the product is unique, or if it is not unique but has significant competitive advantages over other solutions in the field, and if we see potential in the respective market and the company’s ability to grow the business internationally, then we decide that this business model has good potential.
In which industries do you see potential investment targets?
Simeon Iliev: We invest in companies with disruptive technology across various industries. We have invested in FinTech, AgriTech, e-Commerce, HealthTech, EdTech and others. What holds greater significance to us than the sector itself is the potential impact that the company can make within its domain. In the future, we would also like to invest in more companies that are building AIbased products.
What will be your investment strategy going forward?
Stanimir Vassilev: We believe that the investment criteria we currently apply are guiding us in the right direction, and we do not plan to make radical changes to them. However, over the past year, there have been substantial shifts in the investment valuation landscape, and this will inevitably impact our decision-making process for individual investments.