Sale of Bulgarian airfare search company to spur on local market

Sale of Bulgarian airfare search company to spur on local market
By Denitsa Koseva in Sofia August 10, 2017

The recently completed sale of Bulgaria-based cloud software company Vayant Travel Technologies to the US’s PROS Holding, assessed as the second largest such deal in Bulgaria to date, could help the IT sector to attract foreign investors and develop further, Pavel Ezekiev, co-founder of tech venture-capital fund NEVEQ, said in an interview with bne IntelliNews.

NEVEQ was the largest investor in Vayant, supporting the company since its establishment in 2007. The IT company was sold to PROS Holding for $35mn, ranking the deal right after the sale of fellow IT company Telerik, a provider of application development tools, which was acquired by US-based Progress Software for $262.5mn in 2014.

According to Ezekiev, the deal ranks among the top 10 venture-backed exits of a software vendor in the region to a global strategic player.

“I think it’s time — beside the brilliant example of Telerik — to start seeing this more often, for it to be a trend, not a phenomenon, because I think that that in Bulgaria there exists a strong entrepreneurship culture,” Ezekiev said.

Ezekiev added that entrepreneurship is stronger in Bulgaria's more established manufacturing sector, while the software industry is still at an early stage in obtaining financing and as well as “finding the right direction”.

Vayant was set up in 2007 with funding from NEVEQ. Investment fund Cape Capital also put funds into the software company, while German airline Lufthansa joined in 2014. According to Ezekiev, the total investment in the software company amounted to millions of US dollars, but he declined to elaborate. The Bulgarian startup also received know-how to support its development and help it successfully compete with big global rivals.

The Bulgaria-based company has developed technology for airfare search, providing its services to the airline and wider travel industry. It operates across Europe as the local market is too small and does not provide opportunities for significant growth. Its clients include some of Europe’s biggest airlines.

“I think that the significance of this deal and the Telerik one is that when you have a positive example in your neighborhood, this has a positive impact, even if it is symbolic,” Ezekiev said. He added that the investors who exited Telerik have since reinvested their capital in Bulgarian enterprises, which Vayant’s investors are also expected to do.

“I expect that those people will affect the environment, because it’s not just about money — there is money for startups in Bulgaria, the question is whether you can not only engage with a sum, but also provide your time and expertise to the people who want to do something,” Ezekiev said.

He added that this would improve Bulgaria’s image as a place where more and more successful software companies are being established.

“[T]his should lead to increasing interest from investors and clients of those firms,” Ezekiev said.

From PROS Holding’s point of view, the acquisition of Vayant will give it access to European markets and expand its portfolio.

“The combination of Vayant’s shopping, pricing and merchandising with PROS revenue management and real-time availability solutions provides extraordinary value to our customers and partners. Bringing together the complementary travel expertise of our two companies provides a further synergy to support the ongoing changes of the travel industry and opens positive opportunities to Vayant employees. We are honoured to become part of the PROS family,” Vayant’s CEO Eric Dumas said in a statement announcing the deal.