Syndicating a deal with 9 investors: How Econic One secured its €6M Series A

In July, Bulgarian smart e-bike company Econic One announced the completion of a new funding round of €6M. The fresh cash will be used by the company to continue its growth. The round was joined by 9 investors including Innovation Capital, Vitosha Venture Partners , Integral Capital Group , Capital Investments Fund (CIFund), and angel investors incl. partners at LAUNCHub Ventures . Eleven Ventures and Zarian Capital are also part of the growth of Econic One, as they joined the company’s seed round. Every company would be proud to have such a plethora of investors supporting it, but making the deal possible isn’t an easy task. In this article, we’ll share some of the key points you need to know when syndicating such a deal.

“I haven’t seen such a strong presence from Bulgarian VCs and investors in a single deal in my experience. This shows the importance of the deal for our ecosystem in general. And seeing the ambitious plans for expansion of Econic One, it’s no surprise they gathered such a dream team,” Angel H. Angelov, CF , Managing Partner at Innovation Capital, explains.

Why syndicating the deal?

Usually, startup syndicates offer an additional approach to fundraising for founders, which can help them execute their growth plans. Usually, these syndicates include at least 3-4 different investors, which are combining their efforts in a single deal. It provides an opportunity for VCs and angel investors to get access to deals, which usually will be out of their reach.

For Econic One, using the syndication method allowed access to a larger number of investors, and also raise a larger round, which will allow them to accelerate their growth. Another very important aspect was the deep connection of the company with the entrepreneurial and VC ecosystem in Bulgaria. All investors that joined the latest funding round and previous ones are well-known on the scene. Even Zarian Capital, which is established in the USA, has Bulgarian roots - Angel Kelchev being a partner at the fund.

“Establishing its roots deep in the ecosystem will help Econic to stay competitive in attracting talent in our region. Also, this will give them access to advice from a wide of VCs that will support them scale their operations and business,” Angelov explains.

What were the challenges?

When it comes to completing such a big deal, completing such a deal has its challenges. When planning on completing a syndicated investment round, startup founders need to have a lot of patience. The Econic One deal took over a year to be completed, and there were a lot of back-and-forths in making it possible. During different stages, some of the investors were pulling out of the deal, some decided not to join in. It required a lot of coordination between all sides to cross the line.

“I believe every investor in Econic One understands the potential of the company, and that was the reason for the great interest. The coordination between everyone took a long time,” Angelov highlights.

What makes Econic One so special?

There are three main aspects that were key to the decision of investing in Econic One - timing, global economic state, and at least 2X quarter-on-quarter growth in the past 2 years.

Established in 2015, the company has managed to get the perfect timing in developing its solution - smart electric bikes that combine established components and modern technologies. Most people start to see the effects of climate change and are looking for a more sustainable way of transportation. This is a key to Econic One’s growth.

With the current energy prices, more and more people are also looking for a cheaper option for transportation. This is where the smart e-bike provider gives them the opportunity to travel more cheaper and easier.

The financial results of the company are also very impressive. In 2021, Econic One managed to triple its revenue, and the goal for this year is to replicate this milestone, making it a 9x growth compared to 2020. This will be supported by establishing operations in the USA and the DACH region.?The main added value provided by Econic One comes from the software, IoT sensors, and battery technology.?