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Dear readers,

For a year and a half, Bulgarian EU Commissioner Ekaterina Zaharieva has sat at the top table of EU innovation. However, the question remains: what does this mean for startups in Southeast Europe? Our latest brief explores what lies behind Zaharieva’s role, can her appointment open doors for the region, and what regional founders need to do to turn representation into real opportunities.

This week’s edition also highlights Alcatraz AI’s $50M Series B and the cross-border growth of startups Voxa and nFuse. At the same time, turbulence in regional IT continues, with layoffs and downsizing in Serbia and N. Macedonia reminding us that growth is rarely linear.

In our ecosystem take, startup advisor Snezana Zivcevska-Stalpers points out that in the Balkans, technical talent alone won’t pay the bills. For that, you need strategy, sales savvy, and market smarts. 

Enjoy the newsletter!
Bojan Stojkovski
Editor-in-Chief, IT Logs

A Bulgarian EU commissioner puts SEE startups on the map… but then what?

Ekaterina Zaharieva/TechChill

For a little over a year and a half, the EU has had a startup and innovation commissioner from Bulgaria: Ekaterina Zaharieva. On paper, it looks like a win for SEE - representation at the top table, a voice that understands what it means to build from smaller markets, ecosystems, and capital pools.

But representation, on its own, doesn’t rewire systems. During the last decade, the region learned how to celebrate milestones such as funding rounds and exits - but still struggles to convert them into real advantages.

For Momchil Vassilev, managing director at Endeavor Bulgaria and SEE, the question is not whether Zaharieva’s appointment matters, but rather whether the region knows what to do with it.

“Her priorities are the whole EU, not just Bulgaria. She does come to Sofia every now and then, but she’s traveling all over the place. That’s the reality of the role.” he says.

It’s a sober framing, since the assumption that proximity equals influence doesn’t hold in Brussels. Commissioners operate at scale, and their incentives are aligned with the bloc, not with individual ecosystems, no matter how underrepresented they might feel.

However, moments of alignment do emerge. “We are now working together with the European Innovation Council (EIC) to organize an info day. It’s going to be a regional one, in Sofia, and she will join. She hasn’t been to other EIC days. So, that’s a big thing.” Vassilev explains.

A region that still thinks in fragments

At events like TechChill in Riga, Latvia, SEE often feels present, but not unified. Founders from Skopje, Sofia, Belgrade, and Tirana share similar constraints as limited access to capital, smaller domestic markets, and regulatory friction. 

Still, they rarely operate as a coordinated bloc and that fragmentation is increasingly hard to justify. “We didn’t really try to exploit the fact that we (the region) have a commissioner. And I believe we should.” Vassilev tells IT Logs.

While ecosystems across SEE are still organized nationally, the challenges they face are regional. Talent flows across borders, but institutions rarely do, and while capital looks for scale, policy remains local.

Zaharieva, interestingly, reframes the disadvantage. “All countries in Europe are small compared to our main competitors. In that perspective, you are not that different from the others.” she said during a panel discussion at TechChill

Zaharieva during TechChill in Riga, Latvia

“I think the advantage of the slower countries is the agility, the speed, the much faster connection between ecosystems and governments. Don’t underestimate the region.” she added, referring to the Baltics, but with a message that clearly resonates with the Balkans, too. 

Learning from the Baltics, without copying them

For the Balkans though, the Baltics remain the default comparison. Estonia, Latvia, and Lithuania have built reputations that far exceed their size, often cited as proof that small markets can produce global outcomes.

Zaharieva leans into that example. “You have the Baltics as a prime example - digital governments, good legislation, stock options, easy company registration. I never met a founder from the Baltics who had problems registering a company. It’s always digital, not expensive.” she says.

Thus, the main lesson here is coordination. The Baltics didn’t scale because they were individually strong, but because they acted as a system. The Balkans, by contrast, still behaves like parallel ecosystems occasionally intersecting at conferences.

“Whatever instruments and policies are rolled out, they should allow for a regional element. This is how we can create critical mass. Especially in our region, where we’re all small countries that are hard to find on the map.” Vassilev argues, adding that the implication is clear: without regional aggregation, relevance remains limited.

Fixing the missing middle

If SEE has a structural weakness, it’s not at the edges. While early-stage experimentation exists and late-stage success stories are emerging, the real gap sits in between, and that’s the commercialization phase.

Vassilev is now directly involved in addressing it through his role at Bulgaria’s National Innovation Fund. The goal is not incremental improvement, but repositioning.

Momchil Vassilev

Until recently, it was just a pointless addendum to one agency. Now we are working to position it in a specific part of the technology transfer process - to cover the TRLs (Technology Readiness Level) between three and seven,” he says. 

In practical terms, this is where most startups either evolve or stall. Products exist, but markets are uncertain. Teams are forming, capacity is limited and while the risk is too high for traditional investors, it is also advanced for early-stage grants.

The response is structural. “We’re looking at a number of tools and instruments - grant models, but not only. Actually trying to move away from pure grants toward hybrid models - SAFE instruments, convertible grants, recoverable grants.” Vassilev explains.

He further notes that ecosystems built on non-dilutive funding alone rarely develop strong feedback mechanisms. Hybrid instruments introduce accountability, forcing startups to think beyond survival toward scalability, Vassilev adds.

Plugging into Europe’s core systems

The ambition doesn’t stop at national reform, and the longer-term play is integration with the EIC - arguably the most important funding and scaling mechanism for deep-tech startups in Europe.

“We want the National Innovation Fund to be part of the EIC ecosystem. To be the local unit that covers sourcing and preparation of companies that can then progress further.” Vassilev says.

One specific mechanism under discussion is the “plug-in scheme” - a model where national bodies pre-screen startups for EIC funding. “It exists in Europe, but it hasn’t been implemented in the eastern part of the Union. We really think this is something we should do.” he notes. 

If successful, it would fundamentally change how startups from SEE access European capital. Instead of asking it from Brussels directly, they would move through localized pipelines aligned with continental standards.

A hub-and-spoke model, he points out. “EIC deals with the larger accounts, and the local equivalents provide support and selection. That’s how you scale a system.” Vassilev explains.

A narrow window of opportunity

Back in SEE, the implications are clear, but the response is still forming. The region has assets: technical talent, cost efficiency, and an increasing founder ambition. It has access to European instruments, and through the likes of Zaharieva, now has representation at the highest policy level.

“This means a lot - not just for Bulgaria, but for the whole region. If we do a good job in building infrastructure - relevant organizations with relevant resources - it will benefit everyone, even countries outside the EU.” Vassilev says.

Zaharieva at TechChill

The opportunity, however, is time-bound, he notes. SEE has a small, but real window to position itself not as a peripheral participant, but as a testing ground for scalable innovation models within the EU. In the end, Zaharieva’s appointment doesn’t guarantee outcomes - it creates possibilities, and they only matter if you seize them.

“We should be piloting initiatives here that can then be replicated across Europe. We already have the ideas.” Vassilev concludes. 

Across the region…

  • Alcatraz AI has raised $50 million in a Series B funding round backed by investors including BlackPeak Capital, Cogito Capital Partners, Taiwania Capital, Almaz Capital, and EBRD VC. Founded by Bulgarian entrepreneur Vince Gaydarzhiev, a former Apple Face ID engineer, the company develops privacy-focused facial authentication technology.

The Alcatraz AI team

  • Serbia’s startup ecosystem recorded a strong early-stage surge in 2025, according to the latest Garaza report, with a record eight pre-seed rounds and larger deal sizes averaging $1.8 million at pre-seed and $2.8 million at seed stage. The report also notes 15 new startups - up 50% year-on-year - half of which raised pre-seed funding in their first year, while most deals were structured as SAFEs, signaling a shift toward more founder-friendly terms.

  • Romanian startup Voxa has secured over €4 million in a funding round led by Catalyst Romania, with participation from Crescendo Ventures and SeedBlink, as it targets regional leadership in digital books across Central and Eastern Europe. Founded in 2021, the audiobook and e-book platform has surpassed one million users, offers over 200,000 titles, and operates in Romania and Hungary while serving audiences in more than 10 countries.

  • Bulgarian startup nFuse has raised €1.7 million in a funding round backed by Eleven Ventures and LAUNCHub Ventures to expand its AI-powered FMCG ordering solution for retailers via WhatsApp and Viber. Founded in 2026 by Stoyan Ivanov and Stefan Radov, the company is targeting inefficiencies in B2B eCommerce

  • Serbia and Israeli defence company Elbit Systems are set to form a joint venture for drone production. The venture will be 51% owned by Elbit, with the remaining stake held by Serbia’s state-owned arms manufacturer Yugoimport-SDPR, which handles the import and export of defence equipment, sources said.

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Rumor has it…

  • A Bulgarian IT company with a team in N. Macedonia has begun downsizing, in what could mark another setback for the region’s tech industry, which has already been facing mounting pressure from slower funding cycles and shifting market conditions.

  • Serbia’s IT sector is facing a sharp downturn, with around 600 layoffs reported in a single month, as companies including L’Automatica, Zendesk, and Playstudios are said to be behind some of the cuts and office closures.

  • On a more positive note, two regional startups, one from Bulgaria and one from Serbia, are close to securing funding rounds led by a prominent CEE investor, offering a much-needed boost of optimism for the region’s startup ecosystem amid what proves to be a challenging investment climate.

More tech rumors? Ping us at [email protected]

The Ecosystem take… 

Snezana Zivcevska-Stalpers, startup advisor and EU-US market entry expert


IT Logs: How sustainable is Balkan startup funding without EU grants and diaspora capital?

Snezana Zivcevska-Stalpers: Absolutely sustainable, but it requires a shift in how founders think and operate. In Macedonia and across the Balkans, there is still a strong tendency first to look for EU grants or diaspora capital and then to focus on the product development. That should never be the case. In many situations, it becomes a distraction from what really matters, and that’s understanding the market and building something customers are willing to pay for. A startup that focuses early on solving real and urgent problems, engages directly with real customers, and builds traction from the beginning can generate revenue from the beginning and does not need to depend on external funding to survive.

IT Logs: Are Balkan startups building scalable global products or relying on outsourcing? 

As data and AI models become core strategic assets, the willingness to outsource them is less and less. Many startups and companies in the Balkans have recognized that and already started shifting towards the new market trends: building products, platforms, and scalable solutions. Some of them are still operating in a hybrid model, where services generate some cash flows while product development happens in parallel. So the future of the Balkan startup ecosystem will depend on how quickly companies will adopt the new trends on the market, and move beyond just execution-based models and focus more on owning products and solutions.

IT Logs:  What structural bottlenecks most limit the region’s tech ecosystem growth?

The first is the gap between technical strength and business understanding. The region is known for producing technically strong engineers, and that is a real advantage. But building technology and building a company are different things. What is often missing is the business knowledge, knowledge and experience in product strategy, market positioning, pricing, and global go-to-market execution. 

The second bottleneck is the founder’s mindset. Many founders built their products and startups based on their internal assumptions rather than continuous market validation. Founders spend months developing features before speaking to potential customers, or they hesitate to test early versions of their products in the market. Listening, testing, and adapting should be a constant process, but it is not always embedded in how companies operate in the Balkans.

Another critical bottleneck is the lack of a strong commercial and sales culture. Many startups in the Balkan region are heavily product-focused, but forget that building a great product is not enough. Success depends on how you reach the market, how you build partnerships, and how you generate consistent revenue. Without that, even strong products struggle to gain traction. 

Upcoming events in the region…

The Adria Future Hackathon 2026 brings together young innovators for a 24-hour challenge in the inspiring setting of Kotor and Tivat (April 23–24). Focused on AI and sustainability, the hackathon offers participants (up to 35 years old) the opportunity to develop solutions to real-world challenges, with support from mentors and industry experts. With a €5K prize pool and the chance to present at the Summit itself, the event serves as a unique platform for learning, networking, and driving tangible change.

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