Bulgaria’s bold leap: From outsourcing hub to emerging deeptech contender

Sofia: In the global race to become the next big tech hotspot, many countries pour billions into nurturing homegrown talent, courting VCs, and crafting startup-friendly policies. While some struggle to gain momentum, others seem to leap forward—fast.

So, what sets apart these rapid risers? What’s the secret to ecosystem transformation?

Look no further than Bulgaria—a country that’s quietly but confidently building one of Europe’s most exciting tech stories.

For years, Bulgaria has been a magnet for global tech firms thanks to its flat 10% tax rate, highly skilled workforce, and cost efficiency. Industry giants like SAP, Microsoft, Oracle, and VMware have long operated sizable IT hubs in the country, capitalizing on Bulgaria’s deep technical talent pool.

It also leads Europe in one particularly important metric: women in tech. Nearly 29% of ICT roles in Bulgaria are held by women—almost double the EU average—broadening the country’s available talent base and setting a powerful example for inclusivity in the sector.

In 2019/2020, fDi Intelligence ranked Sofia the world’s most cost-effective city for fintech—putting Bulgaria firmly on the radar of global investors.

However, in the last few years, new initiatives have aimed at boosting the country’s homegrown tech companies.

One of Bulgaria’s first big successes was Telerik, a software company producing tools for developers. Although it was acquired by Progress for $262.5 million in 2014, before it could reach unicorn status, this success created a springboard for a slew of new companies. In 2022, the country welcomed its first homegrown unicorn Payhawk, a spend management platform.

According to StartupBlink’s 2024 Global Startup Ecosystem Index, the country now ranks 37th worldwide for startup creation—a promising climb. Bulgarian startups attracted over €264 million in investments in 2023, marking a fourfold increase compared to five years prior—a clear signal that international and regional confidence in the ecosystem is rapidly rising.

Investment into emerging technologies in particular has been significant. According to The Recursive’s State of AI Innovation in CEE report, over €1 billion was invested in Bulgarian and Bulgarian-founded deep tech and AI startups from 2018 – 2023.

“Founders here are more mature now in how they think about business,” says Peter Tsatchev, Principal at VC firm LAUNCHub Ventures. “What we’re seeing is a generation of entrepreneurs building with a global mindset from day one. They’re creating products that can compete with startups out of London or New York. There is a trend that a lot of young folks from the region study abroad and then come back starting with the mindset of building a global company.”

Tsatchev says access to capital is no longer the main challenge. Bulgaria has 15 VC firms managing around €500 million in assets, the next step is getting more people into the founder pipeline.

“What we need are more success stories. When people see someone from their network build a global company, it becomes real. That ripple effect—along with education [in entrepreneurship] and awareness—is how we’ll see the next wave of startups emerge.”

However, homegrown success stories alone weren’t enough to put Bulgaria on the global tech map. What the country truly needed was a bold rebrand—one that would reposition it not just as a hub for outsourcing, but as a serious contender for deep tech innovation.

“The biggest challenge was lack of visibility and recognition,” explains Boyko Takov, Executive Director of the Bulgarian Small and Medium Enterprise Promotion Agency (BSMEPA). “Despite having strong tech talent and success stories, many still saw the country as outsourcing hub rather than as a place for high-growth startups.”

In his view, state involvement is an essential part of building a globally competitive tech ecosystem. “Without institutional backing, scaling an ecosystem internationally is nearly impossible. Public-private collaboration allows for consistent investment in visibility, structured support for startups, and positioning on the global stage. Governments must act as enablers, not just funders.”

BSMEPA has been playing a strategic role in orchestrating ecosystem-wide efforts—coordinating stakeholders, securing international exposure, and aligning public and private forces behind a unified vision.

In 2023, BSMEPA teamed up with regional tech PR agency, Storytelling Studio, powered by The Recursive to launch #BreakingGrounds—an ambitious initiative to reshape Bulgaria’s international reputation and establish it as a European deep tech leader by 2027.

The mission? To elevate Bulgaria’s presence on the global stage by showcasing its top tech talent and startups on Europe’s top tech stages.

“2024 was a pivotal year for #BreakingGrounds,” says Teodor Antonio Georgiev, Co-Founder & Head at Storytelling Studio. “Through our delegations at events like Web Summit, Slush, VivaTech, and Bits & Pretzels, we engaged over 350,000 global investors and innovators. More than 100 Bulgarian companies participated—and the initiative helped generate over €16 million in investments and deals.”

Digital identity regtech startup Evrotrust, raised €3.3M in 2024. Konstantin Bezuhanov, CEO, said, “Being selected to pitch at the opening ceremony of Bits & Pretzels was an extraordinary opportunity for Evrotrust to showcase our innovation to a global audience of investors and industry leaders.

This wouldn’t have been possible without the strategic guidance and support from the #BreakingGrounds team, who ensured we were positioned on the right platform at the right time. Their expertise in navigating top tech events and creating high-impact visibility has been instrumental in our strategy for international exposure.”

In 2025, #BreakingGrounds is yet again embarking on a whirlwind tour of tech conferences with the best of the best in Bulgarian tech with visits to ViennaUP, Reflect Festival, GITEX Europe, We Make Future, Bits & Pretzels, How to Web, Slush, Web Summit, and of course, TNW2025!

And there’s more on the horizon: a new regional delegation model will debut at ViennaUP, uniting Bulgaria with Hungary, Czechia, Latvia, and Austria under one Central and Eastern Europe (CEE) tech umbrella.

“CEE countries are stronger together,” says Georgiev. “When we present the region as a unified tech powerhouse, we attract greater investment, media attention, and corporate interest.”

While still early in its journey, Bulgaria is no longer just aspiring—it’s participating. The country’s startup ecosystem is becoming more visible, more networked, and more ambitious in how it presents itself to the world. With public and private actors increasingly aligned, there’s still ground to cover, but the intent—and potential—is clear.

“Despite the fact that our political image on a broader level is not always where we want it to be, there is a clear commitment from the people within the government and institutions to support the development of our startup ecosystem. A perfect example of this is that the very first EU Commissioner for Startups in history is Bulgarian — Ekaterina Zaharieva. This sends a strong signal that Bulgaria is becoming a serious player in the European tech landscape,” Georgiev believes.