Over the past few years, Bulgaria has gone from having a small patchwork of digital finance startups to hosting more than 150 fintech companies, most of them clustered in Sofia. The sector has seen consistent growth in revenue, investment, and international visibility, and it’s not just about volume. It’s about how these companies are scaling fast, experimenting across verticals, and attracting global backing.

The digital payments segment is especially dominant. It makes up about a third of all fintech activity in the country and drives more than 60% of the industry’s revenue. Names like BORICA, Paynetics, and EasyPay form the local backbone, while giants like Visa and Mastercard have set up shop here too. Add in Bulgaria’s first fintech unicorn, Payhawk, and a wave of crypto innovation led by companies like Nexo, and the picture gets clearer: Bulgaria is a testbed for real fintech ambition.

So, how did this happen? What role did regulators, banks, and cross-border investors play in shaping the ecosystem? And what’s next as Bulgaria eyes eurozone entry and deeper EU integration?

That’s what we’re about to explore.

Regulation: Stability First, Innovation Close Behind

Bulgaria’s financial regulation system is methodical, and that’s part of what’s helped the fintech ecosystem grow without overheating. At the centre of it all sits the Bulgarian National Bank (BNB), which acts as the country’s central bank, banking regulator, and macroprudential watchdog. It issues licenses for banks, payment institutions, and e-money firms, oversees financial stability, and implements EU rules like PSD2.

Since 2020, the BNB has been under “close cooperation” with the European Central Bank, meaning the ECB now supervises Bulgaria’s largest banks directly through the Single Supervisory Mechanism (SSM). This was a major step forward in aligning with the eurozone. The BNB has gradually raised capital buffers, like the countercyclical capital buffer (CCyB), which hit 1.5% in 2023 as a way to prevent excessive credit growth and make the system more shock-proof.

Speaking of eurozone preparations, Bulgaria still aims to adopt the euro, even though that timeline has slipped past 2025 due to inflation concerns. But regulators are treating it like a when, not an if. The BNB recently connected its national payment system (BISERA) to the ECB’s TIPS platform, enabling instant euro transfers, one of the last pieces of technical infrastructure needed for euro adoption.

Another big name in the regulatory space is the Financial Supervision Commission (FSC). While the BNB handles banks and payments, the FSC oversees insurance, pensions, capital markets, and non-bank finance. They’ve started to lean into fintech more actively, rolling out a Strategy for Monitoring Financial Innovation (2021–2024) and showing openness to ideas like a regulatory sandbox, though a full one hasn’t launched yet.

There’s also the Ministry of Finance, which handles legislation and coordinates Bulgaria’s eurozone strategy and post-COVID recovery investments. Their work with the BNB and FSC helps align Bulgaria with upcoming EU rules like MiCA (for crypto) and DORA (for digital operational resilience).

So far, this three-pronged setup (BNB, FSC, and the Ministry) has struck a fairly good balance between financial stability and fintech growth. One key challenge, however, remains financial literacy. Bulgaria’s population still struggles with understanding new financial products, especially digital ones. The government’s Financial Literacy Strategy (2021–2025) tries to tackle that, but making fintech truly inclusive will take time.

Commercial Banks, Neobanks & Fintechs: Digitalisation Meets Consolidation

Bulgaria’s banking sector is concentrated, foreign-owned, and (over the past few years) quietly getting a digital overhaul. As of the end of 2023, 23 banks were operating in the country, including six branches of foreign banks. But it’s the top five that run the show, holding nearly 77% of all banking assets. That level of concentration isn’t new, but what’s changed is how these banks are operating.

There’s been a steady wave of consolidation. The most recent example was in 2023, when Postbank (Eurobank Bulgaria) acquired BNP Paribas Personal Finance Bulgaria, tightening its grip on the retail lending market and expanding its customer base.

Banks like UniCredit Bulbank, DSK (OTP Group), UBB (KBC), and Postbank are not only dominant but also investing heavily in digital transformation. Bulgaria’s eurozone ambitions are pushing banks to modernise legacy systems, tighten up compliance, and rethink how they deliver services online. A lot of this is also driven by necessity, such as regulatory alignment and rising customer expectations.

United Bulgarian Bank (UBB), part of the Belgian KBC Group, has been getting noticed not just for tech upgrades but also for its ESG credentials. In 2024, UBB was named Best Digital Bank and Best ESG Bank in Bulgaria by Euromoney, proof that digitalisation and sustainability can go hand in hand.

Meanwhile, neobanks and fintech-style lenders are starting to carve out their own space. A major move came in 2024 when Advent International announced it was acquiring tbi bank, a Sofia-based digital-first bank focused on Buy Now, Pay Later and consumer lending. Tbi isn’t a classic neobank, but it plays like one: mobile-first, quick onboarding, and accessible financing options.

On the infrastructure side, Evrotrust has become a key tech provider, especially in digital identity. In 2023, the Bulgarian government officially adopted Evrotrust’s eID scheme as the national standard for electronic identification, allowing people to sign documents and access public services online. The company is also working with private clients. Porsche Finance Group Bulgaria now uses Evrotrust to digitise internal workflows.

Beyond banks and neobanks, Bulgaria also has a handful of heavyweight fintechs that are powering much of the ecosystem’s infrastructure:

• BORICA, a state-backed payment infrastructure provider, runs the Blink instant payment system, launched in 2021 for 24/7 transfers in BGN. It later added person-to-person transfers via phone number, and is now being linked with the ECB’s TIPS platform for euro instant payments.
  
• Paynetics is a licensed e-money institution that operates across the EU and UK, offering card issuing, embedded finance infrastructure, and payment solutions to fintechs and merchants.
  
• iCard is one of the oldest fintech names in Bulgaria. Its digital wallet app supports IBAN accounts, P2P transfers, foreign exchange, and even crypto/metal investments. The company now serves 1.8+ million clients in 30+ countries.
  
• And EasyPay, while sometimes flying under the radar, is one of the most widespread hybrid payment platforms in Bulgaria, combining physical cash-in/cash-out points with digital services and integrations into the national payments infrastructure.

Fintech Startups & Investment Beyond Unicorns

For a long time, Bulgaria’s fintech scene flew under the radar. That changed in 2022, when Payhawk raised a $100 million Series B extension led by Lightspeed Venture Partners, officially becoming Bulgaria’s first unicorn.

But Payhawk isn’t the only company making a difference. Over the past five years, Bulgaria has quietly grown a dense network of fintech startups, more than 150 by 2022. Most of them are SMEs based in Sofia, but their ambitions are regional, and sometimes global.

Take Iris Solutions, one of the first licensed open banking providers in Southeast Europe. They offer infrastructure for banks and fintechs to launch PSD2-compliant services. Or Boleron, an insurtech startup building a fully digital insurance platform. In 2023, it raised €2.1 million to expand into Greece and Romania, showing that regional investors are now looking at fintech through a wider lens.

So, what’s fueling all this? A mix of local and international capital. Funds like LAUNCHub Ventures and Eleven Ventures have backed some of the biggest names in the market, including early rounds for Payhawk and Nexo. LAUNCHub has also invested in Nexo’s early stages and continues to raise fresh capital for fintech and deeptech bets across the region.

Meanwhile, foreign investors are getting in earlier than they used to. Payhawk’s $100M round brought in Lightspeed, Greenoaks, and Earlybird. Even crypto startups like Nexo, though they’ve had a bumpy regulatory ride, drew global capital during the boom years. Some startups like Phos, a SoftPOS provider that turns Android phones into card readers, even got acquired by big names (Ingenico picked them up in 2023).

What’s also interesting is how established players like Paynetics are acting like platforms for others. Besides offering embedded finance infrastructure, Paynetics has actively supported fintech entrepreneurs, partnered with startups like Phyre, and even acquired UK neobank Novus to expand its digital reach.

From a macro perspective, Bulgaria still isn’t a massive funding market. But it still performs beyond expectations. In 2023, over €260 million in startup funding was raised in Bulgaria across all verticals, and fintech remained one of the strongest categories. According to StartupBlink, Bulgaria ranked 37th globally in the Startup Ecosystem Index, with Sofia acting as the central hub for innovation.

So while the unicorn headlines matter, the real story is about ecosystem depth. A growing number of fintech startups, VC funds with regional reach, and a few high-profile exits have created momentum. And if Payhawk’s rise is any indication, Bulgaria’s next breakout fintech might already be in the works.

Associations & Support: Who’s Holding Up the Fintech Scene

Behind the startups, funding rounds, and flashy exits, there’s a surprisingly solid support system helping Bulgaria’s fintech ecosystem grow. And for a relatively small country, it’s got a few things going for it that others don’t.

The Bulgarian Fintech Association (BFA) is probably the loudest voice in the room. Since 2018, they’ve been the go-to group for research, advocacy, and general ecosystem-building.  Then there’s the Visa Innovation Program, which Bulgaria helped launch and now co-leads through Eleven Ventures. 

What started as a local accelerator has turned into a regional platform connecting fintech startups across Greece, Turkey, and Bulgaria, with Sofia acting as a central hub. Startups in the program run pilots with Visa’s corporate partners and banks, which is a big deal when you’re trying to validate a product in a conservative industry.

And it’s not just Visa. A few years back, Raiffeisen Bank’s Elevator Lab also ran a chapter in Bulgaria to scout for fintech partnerships. One notable graduate was actually Phos, the SoftPOS startup that eventually got acquired by Ingenico. It’s a good example of how these programs can bring real value. 

Add to that startup hubs like Campus X, where fintech founders work out of the same building as VCs and tech mentors, and you get an ecosystem that’s tight-knit, not siloed. Some of the Visa program activity even took place there.

So while there’s no formal regulatory sandbox (yet), the combination of active associations, corporate-led programs, and VC-accelerator overlap has created a pretty functional support structure. It’s not flashy, but it works. And it helps explain why a country with just 7 million people keeps putting interesting fintechs on the regional map.

Conclusion: Early Days, Big Signals

Bulgaria’s financial sector has undergone major shifts in recent years, from the consolidation and digitalization of traditional banks to the rise of a growing fintech startup scene. It’s not the largest market in the region, but it’s moving fast and making itself hard to ignore.

What stands out in a Central and Eastern European context is the density and profitability of its fintech ecosystem. Bulgaria actually outpaces Romania in both the number of fintech companies and sector performance, and while it hasn’t positioned itself as a licensing magnet like Lithuania, it stands out for its engineering talent, strong infrastructure, and cost-effective environment. 

The sector is still in early stages, but it’s vibrant, well-networked, and building from solid fundamentals. With active associations, cross-border accelerators, and a healthy mix of local and foreign investment, the conditions are right for entrepreneurs to scale.

In the larger context of CEE, Bulgaria has positioned itself as both a collaborator and a competitor, collaborating to build regional fintech synergies while competing by offering a highly skilled yet cost-effective environment for financial services development. 

The country’s first fintech unicorn and successful exits signal the coming of age of the ecosystem. Going forward, the continued inflow of EU funds, the prospect of euro adoption, and sustained tech innovation are poised to further integrate and advance Bulgaria’s financial market

The Prestigious CEE Fintech Oscars: Recognizing Excellence in Innovation

The Startups Tournament, a key component of UNCHAIN Festival, is designed to spotlight the most promising tech startups. Founders across the CEE are invited to showcase their projects and vie for recognition, support, and investment in an atmosphere buzzing with creativity and collaboration.

“As a global centre of tech development and a hub for innovation, UNCHAIN Festival is the perfect platform for startups to showcase their innovative solutions and connect with industry leaders, investors, and enthusiasts,” said Alexandra Pollack, CEO & Co-founder of UNCHAIN Festival. “We’re excited to provide startups with an opportunity to shine on stage and accelerate their growth in this dynamic ecosystem.“

The Startups Tournament invites early-stage startups with tech solutions that demonstrate significant potential for impact and scalability. Selected finalists will have the chance to pitch their projects live to a distinguished panel of judges comprising industry experts, investors, and thought leaders.

In addition to exposure and networking opportunities, participants will compete for a range of prizes, including, mentorship from industry veterans, access to investor networks, and complimentary exhibition space at future UNCHAIN events.

Welcoming back the winners of previous editions

“We were honoured to be the winners of the first edition, and I believe that UNCHAIN had an incredible energy. Everyone was attending the festival in Oradea for the first time and felt the responsibility of shaping something outstanding, building the DNA of the festival. Some great investment conversations came out from my time in Oradea, and fintech explorations with the likes of Visa. Such ecosystems in CEE are hugely needed.”, Maria Tanjala, FilmChain Co-founder, the winner of the 1st UNCHAIN Startups Tournament. 

“By being on stage a lot of investors and banks come to talk to us. We had great conversations and that was extremely valuable. We’ve learnt a lot, which added a lot of value to who we are and how we’ve grown. What I love about UNCHAIN it’s that it is not a 4000 people event, it’s a very curated event of very important people from the industry. It’s almost like a handpicked selection on who is who in the region for the fintech vertical and you don’t have many events like this which create that impact.”, Rohit Bhosale, Synapze CEO`s, the winner of 2nd UNCHAIN Startups Tournament. 

Application Deadline: May 31st – Don’t Miss Out!

Entrepreneurs eager to participate in the competition are encouraged to submit their applications online through the official UNCHAIN Festival website >> https://unchainfestival.com/startups/. Registrations are available until May 31st, but act swiftly, as applications are reviewed and chosen following each submission.

UNCHAIN Festival, renowned for its engaging panels, insightful keynotes, and vibrant networking opportunities, will take place on 19-20 June 2024 at Oradea’s fortress, Romania. For more information about the Startups Tournament and UNCHAIN Festival, including ticketing and sponsorship opportunities, visit the event website >> www.unchainfestival.com

UNCHAIN on CEE tour: explore innovation across the region

Preceding the summer festival, a series of online events, the Demo Days, will bring an even closer spotlight on the disrupting potential the region has to uncover. 

• UNCHAIN Demo Day – Romania | Bulgaria | Greece | Ukraine | Moldova 
• UNCHAIN Demo Day – Hungary | Croatia | Serbia | Slovenia 
• UNCHAIN Demo Day – Austria | Czech Republic | Slovakia | Poland

The Demo Days will serve as a precursor to the main event, offering a platform for startups and innovators to showcase their groundbreaking ideas and technologies to a global audience. Through engaging presentations, live demonstrations, and interactive Q&A sessions, participants will have the opportunity to highlight the transformative impact of their projects and gain valuable feedback from industry experts and potential investors. 

Digital Payments Revolution

The CEE region is experiencing a surge in digital payments adoption, driven by factors such as increasing smartphone penetration, changing consumer behavior, and supportive regulatory frameworks. Expect to see continued growth in digital payment solutions, including mobile wallets, contactless payments, and peer-to-peer transfers. With a focus on convenience, security, and efficiency, FinTech companies will play a crucial role in driving this digital payments revolution across the region.

Blockchain and Cryptocurrency Innovation

Blockchain technology and cryptocurrencies are gaining traction in the CEE region, presenting new opportunities and challenges for the FinTech industry. As more businesses and consumers embrace digital assets, expect to see increased innovation in blockchain-based solutions, such as smart contracts, decentralized finance (DeFi) platforms, and digital identity management systems. Additionally, regulatory developments and government initiatives aimed at fostering blockchain innovation will shape the landscape for cryptocurrency adoption and usage across CEE countries.

Rise of Neobanks and Digital Lenders

Neobanks and digital lending platforms are disrupting the traditional banking sector in CEE, offering innovative financial products and services tailored to the needs of modern consumers and businesses. Over the next two years, expect to see the continued emergence of digital-first banking solutions, including virtual banking accounts, personalized lending algorithms, and automated loan approvals. With a focus on accessibility, affordability, and customer experience, neobanks and digital lenders will continue to gain market share and drive competition in the financial services industry.

Regulatory Evolution and Compliance Focus

Regulatory frameworks governing the FinTech sector in CEE are expected to evolve in response to technological advancements and emerging risks. Regulatory bodies across the region will likely introduce new guidelines and standards aimed at promoting innovation while ensuring consumer protection, cybersecurity, and financial stability. FinTech companies will need to prioritize regulatory compliance and invest in robust risk management and cybersecurity measures to navigate the evolving regulatory landscape and build trust with customers and stakeholders.

Cross-Border Collaboration and Expansion

Collaboration and partnerships between FinTech companies, traditional financial institutions, and other stakeholders will become increasingly important for driving innovation and expanding market reach across borders. Over the next two years, expect to see more cross-border collaborations, joint ventures, and strategic alliances aimed at leveraging complementary strengths and resources to address regional challenges and capitalize on growth opportunities. Additionally, as CEE FinTech companies look to scale their operations and enter new markets, strategic international expansion will be a key focus area, driving greater competition and diversity in the global FinTech ecosystem.

As a conclusion, the Central and Eastern European FinTech sector is poised for dynamic growth and innovation over the next two years, driven by digital payments revolution, blockchain and cryptocurrency innovation, rise of neobanks and digital lenders, regulatory evolution and compliance focus, and cross-border collaboration and expansion. By staying agile, responsive to market trends, and focused on customer needs, FinTech companies in CEE can capitalize on emerging opportunities and play a leading role in shaping the future of finance in the region and beyond.