How Public Administration Brought €16m To This Norwegian Company Cofounded By Bulgarian Entrepreneur
Documaster is a five-years-old Norwegian company with a Bulgarian co-founder that has built its customer base as a result of the digitization and modernization of public administration. Developing a system for archives management compliant with the standards in Norway, Documaster managed to grow into a business that has attracted over $17m of external capital.
Last month, the investors of the company, which has its biggest development team in Bulgaria, increased its capital with €3m to boost the further growth of the business and enter the private sector. Prior to this, in 2017 Documasters received a boost of €10.5m, and has closed two smaller rounds totaling €2.1m soon after it was founded.
Put some order into the public administration mess
This is probably the most accurate expression that is the main purpose of Documaster. The company was started in 2014 as a spin-off of the tech incubator Norselab and around the Norway national standard for archiving of documents.
Documaster’s main product is a cloud-based archiving solution that connects different software systems used in organizations and archives the documentation in a predefined way. The technology addresses the growing need for efficient and compliant archiving, driven by the rapid growth in digital documentation and increased regulatory focus on record management. It makes it possible to connect different organizations and institutions and store the files in a central engine so that different branches and agencies can access them.
The company has around 200 clients, 97% of which are in the public sector, and expects to reach a turnover of €3m this year. In 2018, Documaster made its first step outside Norway, implementing Documaster in five municipalities in Sweden. A year and a half ago, the company tried to enter the US market, but froze the plan soon after the first attempts, as this step was seen as an unnecessary distraction by the team at the time.
The Bulgarian connection
Even though Documaster’s main business is in the Nordics, the biggest office of the company is in Bulgaria, where Dimitar Ouzonov, the co-founder and CTO of the startup, comes from. Out of the 80 team members, 48 are in Sofia, working on the software product. The Bulgarian presence was established shortly after Documaster was founded – in 2015, and the team has doubled since the first large round of investment in 2017, when the company received €10.5m from the Scandinavian investment fund Summa Equity.
Whether Bulgaria could be more than an R&D location for the company, a market, for instance, is questionable. It, however, brings along interesting know-how in the business to government domain.
Business to government
How could startups work with the government? This is a topic that is definitely interesting in Eastern Europe and a domain where the Nordics can provide good practices. “Norway is an interesting example. Back in the 1980s when the archiving standard was released for the first time, the government called out to private companies to develop solutions for the standard,” explains Georgi Vasilev, Country Manager for Bulgaria, how the public sector works over there. “The companies that provide technology for public services are also part of the discussion about the further development of public administration standards,“ he adds.
“Our company was started within an existing market with competition. The fact that there was an obligatory national standard to comply with at that time, gave Documaster the opportunity to have a basis and start developing in this domain. The first client was the municipality of Trondheim,” tells us Georgi Vasilev. Since then, the startup has gained a large customer base within the public administration and is now planning to start offering a simplified solution also to the businesses. The fresh capital will be used exactly for this next step.
