Kamen Bankovski is a partner in Vitosha Venture Partners, a Sofia, Bulgaria-based early-stage venture capital fund and has deployed over 22 million euro and financed and supported over 100 start-ups.
He has actively mentored 350+ startups, as he participates as a mentor and speaker in accelerators, training programs, and tech and startup events and conferences throughout the SEE region. Kamen helps various projects, initiatives and start-ups in the SEE, working with regional investors and organizations to provide general support for entrepreneurship.
Vitosha Venture Partners is a community partner of the Balkan eCommerce Summit 2024, and this is the reason why Kamen is guiding us through the specifics of investing in e-commerce startups.
What specific criteria do you look for when considering eCommerce startups for investment?
Regardless of the vertical we’re investing in, we’re always focused on scalability as an overarching characteristic. Is a subjective measurement that can be broken down into multiple characteristics that encapsulates the entire business. If the problem the company is solving is experienced by a large number of people or organizations, then there’s a large potential market and, thus, room for scalability. If the company has a good business model, in other words, makes money, then money can be spent on marketing, new products, team growth, which means fire power for scalability. If the product or service is unique and there aren’t many competitors doing a similar thing, market share is easier to get, less resources go into fighting competitors, more resources go for customer acquisition and product development, thus increasing scalability. If the team is well-rounded, has expertise or experience in the industry, can execute, and can attract other amazing people to the company, that increases their likelihood of scalability. In simple terms, we assess all of the business fundamentals of the company we’re looking to invest when we make our decisions.
How does your fund typically approach early-stage versus later-stage investments in the eCommerce sector?
With every “stage” of a startup’s journey, we’re looking to see what the company has done to de-risk itself since its last stage, as start-ups are amongst the riskiest investments. The questions around a startup are usually quite similar, regardless of their sector. Can I develop my product or service and does it work? Are there enough people or companies willing to buy it? Do I know how to find them and sell to them? The longer the company has been existing for, the more answers to these questions they should have and the more nuanced these questions become. And, equally importantly, what more has the company learned, in order to pursue these answers constantly going forward, as they never stop to be relevant, regardless of a company’s stage of development.
What current trends in the eCommerce industry are most exciting to you, and how do you see them evolving in the next few years?
Exploring trends in eCommerce is not about chasing the latest buzzwords for us. We find enduring value in developments like AI, but we are seeking trends with longevity rather than mere hype in mind. We are always looking at companies that have sustainable and scalable business fundamentals. What excites us is not just current flair but the potential for these trends to mature into industry mainstays going forward.
What key performance indicators (KPIs) or metrics are particularly important when assessing the potential of an eCommerce startup?
The numbers should be in complete coherence with the story that the founders are telling about their company. When looking at KPIs, we look for quantitative measured indicators of the dynamics and scalability that the company represents. Some typical examples like customer acquisition cost, customer lifetime value, conversion rates, and repeat business metrics offer such insights. Equally important is the attitude of the team towards their KPIs, the specific KPIs they decide to monitor and when, and how they act upon the information they receive through their KPIs. Startups are all about experimentation and KPIs are how you assess your experiments. There’s nothing cooler than a founder who knows their metrics and can break them down and their logic right there in the meeting. Correspondingly, it’s not the best sign when the founder has to “follow-up with you after the meeting” on their key metrics.
Can you share examples of successful eCommerce investments in your portfolio, and what factors contributed to their success?
We have quite a few investments in ecommerce technology and tools like CloudCourt – a SaaS platform for online store creation and management, Sheetly – a product information management tool for online merchants, Chathalla – a tool for online merchants to analyze user behavior, purchase history, and browsing patterns. We have also invested in multiple marketplaces, like Swipe.bg – for refurbished phones, krik.bg – for automotive parts, Agriniser – for wholesale buyers and sellers of grain. What they all share is their demonstration of a large potential market, a uniqueness to their product or service, and the ability to execute and go-to-market.
How do you typically support portfolio companies in the eCommerce space, and what role does your team play post-investment?
Post-investment, our role in supporting portfolio companies is not about us being drill sergeants but strategic partners. We’re not here to micromanage. Instead, we offer guidance, share insights, and provide resources to help our portfolio companies thrive. Our approach is collaborative, ensuring that we contribute meaningfully to their growth without stifling their entrepreneurial spirit. Additionally, we share our network to help our companies find great additions to their teams, mentors and advisers, new potential clients and partners, and investors to invest alongside us, or in future financing rounds.
Balkan eCommerce Summit 2024 is a two-day forum that will take place in Arena Sofia on April 4 and 5, 2024. The organizer of the event, Nikola Ilchev, promises an impressive event that will bring new perspectives in e-commerce to the Balkan region.
If you plan to develop a business in the Balkans or beyond, your place is at the Balkan eCommerce Summit 2024 https://balkanecommerce.com/.