It’s no secret that in Vitosha the earlier the stage of the investment, the more we focus on the vision of the startup and the founder backgrounds. After all, when there are no numbers to look at yet, all we place a bet on is how much of the founders’ conviction and vision rubs off on us.
And that conviction and vision is the very reason why we found ourselves one freezing February afternoon in the kitchen of Talents restaurant, one of Sofia’s better fine dining establishments. Talents was launched over a decade ago as part of a Sofia-based culinary academy, which trains chefs for leading hotel chains around the world. The academy was founded originally in the Netherlands and opened a branch in Sofia as it grew, and this Dutch connection was exactly where the story of our portfolio company FoxCrop started.
After graduating with a double masters’ degree from the University of Maastricht, Stefan Zhelyazkov decided to come back to his native Bulgaria, to chase opportunities in the rapidly growing hospitality industry here. Next to his business education, he also raked up considerable experience running bars and restaurants in the Dutch university town, and decided to connect with the owner of the culinary academy when he found out that the Maastricht-origin school had a branch in Sofia. That landed him his next job, managing the operations and marketing of the culinary academy, and its restaurant side business.
It was in that capacity that he met Dimitar Dimitrov, who similarly got his masters’ degree abroad, in Heidelberg in his case, and after an endeavor at a hospitality business in Austria, decided to try his luck back home in Bulgaria. Optimizing the operations of Talents restaurant, Stefan found out that the most difficult thing to get a grip on were the availability, ordering, and delivery of high quality ingredients for restaurant kitchens. Together with Dimitar, they decided to check out how other, more established restaurant chains solve the problem, only to find out that it’s a chaotic mess everywhere.
“You won’t believe it”, says Stefan, as we walk between sizzling pans and sous-chefs carefully constructing hors d’oeuvres in the open kitchen at Talents. “Every Sofia chef I talked to told me the way you order ingredients is by calling farms and distributors by phone or at best sending requests by text message. All the time it happens that you get promised, say, 20 kilos of tomatoes one day, only to find out the next day that you get only 10, as someone else called before you but the seller forgot to take a note of that order”.
And so Stefan and Dimitar decided there’s an opportunity here. After all, the hospitality industry is Bulgaria’s second largest (after agriculture), and if this problem could be solved even partially, there would be a business case on their hands. After going through several technical founders, all ending in breakups, they found the best possible match in Simeon Vasilev: an all-round full-stack ninja, with solid experience and most importantly, someone who understands what Stefan and Dimitar were trying to solve, as Simeon’s parents own a tomato farm not far from the town of Pazardjik, and he spent many summer holidays helping them out with the harvesting.
Thus the idea of FoxCrop was born: a platform on which producers can list their goods, as well as manage availability windows, payments, and deliveries, and have a one-stop-shop for negotiating with the restaurant buyers. As Stefan explains, it’s a very different business from your regular consumer online produce retail. “Restaurant demand is very seasonal, and as you probably know from dining out, the kind of items you see on restaurant menus are often more special. It’s hard enough to source delicacies like truffles or heirloom tomatoes that are native to us here in Bulgaria. But think about imported goods, like king prawns or avocados, and the entire process becomes that much more complicated”.
Dimitar adds that it’s not just the high-end restaurants: “That’s where we start, because the need and the sophistication are higher there. But we already talked not just to the top 20 chefs in Bulgaria, but also to some of the bigger mainstream restaurant chains, some of them with over 30 restaurants. Their problems are exactly the same, and even bigger, due to much higher volumes”.
At Vitosha of course we like our restaurants, and the team’s precise understanding and articulation of the problem and opportunity made a strong impression on us. FoxCrop got accepted late last year into Vitosha’s ACCELERATE program, with a EUR 30k investment to test out the hypothesis and launch an MVP with several dozen customers that already signed up for a trial.
As Stefan and Dimitar pointed out to us, the market validation is already there: German-based Choco delivers a similar product, and is currently making a noticeable impact in some Western European and Latin American markets. “I believe we can build a significantly better product, better accustomed to local needs, given the lower starting position that local and regional restaurant businesses start from. In some markets, a part of the solution we’re building with FoxCrop is taken care of by large wholesalers, but in dozens of European countries, including Bulgaria, this consolidation hasn’t happened yet, and we have a good chance of being ahead in that game, with a purely technological solution”, adds Stefan.
So if all goes well, you will notice FoxCrop, even if you’re not yourself active in the restaurant space. How many times has it happened that you glowingly see a favorite dish on a restaurant menu, only to find out from the waiters when they take your orders, that the item is unfortunately not available today? Once FoxCrop launches, the goal we bet on at Vitosha is that it occurs considerably less often, and maybe even never at all.