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SEAF Macedonia VP on PwC Start-up Conference Panel

SEAF Macedonia VP on PwC Start-up Conference Panel

March 9, 2020 – Skopje, North Macedonia – On February 27th, 2020, SEAF Vice President Viktor Meshkov participated in the first start-up conference organized by PWC “Pitch.Match.Grow”, discussing some of the most important issues around start-up investing in North Macedonia, providing feedback to the start-up companies during the pitch session and continuing the conversation with the most promising of the start-ups. Below we share the key takeaways from the event.

1. Over the last two years, there is an emergence of a lot of new players on the investors’ side of the start-up ecosystem, filling some gaps in this segment. One of the fun facts is that SEAF as one of the first alternative investors in North Macedonia, with active market presence for more than 20 years, still presents its products to entrepreneurs as something new on the market. This speaks for the low development level of the capital market in the country, which on the other side has shown fast progress in the last few years. One of the reasons for this advancement is the more organized approach facilitated by newly established association “Start-up Macedonia”, created by a group of Macedonian startup enthusiasts who have one common goal: to connect the Macedonian startup community through a data-driven approach and encourage and help create a favorable work environment for startups in North Macedonia. Their systematic approach has led to creating a digital platform including all players in the start-up ecosystem and investors mapping (see below), where SEAF is clearly stated as one the most appropriate investors for companies seeking funding in Series A round or at a later stage. It is also worth mentioning that SEAF still remains the only option for companies willing to raise funds in Series B round or later.

A map describing the Investor landscape in North Macedonia

2. Market development remains one of the main challenges of Macedonian start-ups. Expanding into new markets is definitely the biggest “pain” of most local businesses, regardless of their primary product or service. In most cases, this problem is even bigger than developing the product itself. This issue was also addressed in the research conducted by “Startup Macedonia” about the Macedonian eco-system. Most of the businesses that are successful in this domain have either established joint ventures with foreign businessmen or started a partnership with their friends or relatives who live and work abroad. This shows a lack of both finance (mostly for marketing purposes) and relevant knowledge of the Macedonian entrepreneurs. This is why the demand for smart money is now bigger than ever.

3. The global funding and trading platform Funderbeam, originally established in Estonia, was introduced in North Macedonia. PwC North Macedonia, as a facilitator, and the Macedonian Stock Exchange, as an intermediary in the platform launch, presented this opportunity to all interested startups at the conference. The Funderbeam concept resembles a perfect blend of a start-up stock exchange on one hand and the general crowdfunding model on the other. All relevant information/promo materials for each of the investment candidates are listed on the platform and are visible for all potential investors. The entire investment process for each candidate must be guided and managed by a lead investor (experienced financial institution or private individual with a finance background) that should first structure the investment and invest immediately after. All other interested parties (usually very small but numerous investors) are encouraged to invest according to the same terms as the ones agreed for the lead investor. The aggregated funds are then used for establishing an SPV in Estonia that would ultimately invest in the company as a single investor. The platform also allows further trading with the company’s shares on the secondary capital market, making the exit routes very easy. This innovative way of raising capital might become a very attractive tool for advanced startups. SEAF is among the rare institutional investors in North Macedonia that has both the relevant knowledge and legal structure to embrace the role of a lead investor for exceptional companies with high growth prospects.