Dean Bezlov and Yavor Mihaylov have graduated the same high school, but because of their age difference, they know each other from a Facebook group. What connects them, along with the other founders of the company for digital twins MYX, is their interest in robotics and their mutual schools. This is the story of how a high school passion becomes a fast-growing business with products being used by Bulgarian and Western telecommunication operators. The five founders can easily say that they are behind one of the most innovative startups in Bulgaria - there is no other company like that, and there are only a few more in the whole world.
MYX develops digital twins - precise 3D models of physical objects. The main focus of the company is the telecom industry, because it has plenty of towers, full with equipment, bolts and nuts, that need constant care and support. In short, when telecoms need to upgrade or fix something at a tower, they don't have to send in a whole team just to see what is or what is not there, how high or wide it is - instead, they can have digital twins of their assets, where every bolt and nut is exactly as it is in real life.
"MYX begin as an idea two years ago and since then we have been doing nothing else. We gather data, like photos from drones, so that we can produce full, logical and useful information. With a 20-minute drone flight we can have 10 gigabytes of data, with every nut shot from four angles, and companies can know what they have at every location", says Yavor Mihaylov.
SMG, Warwick and an idea
Mihaylov is born in 2001 and is one of the founders of the robotics club in the Sofia Mathematics High School (SMG), along with another co-founder of MYX, Mihail Georgiev (born in 1999). They started showing interest in drones and racing equipment in different time periods, but their passion helped them meet Dean Bezlov, who is also from SMG, but is nine years older than Mihaylov.
"We were talking about robotics and from hardware we went to software - how the 3D pictures that we take with drones for example, can be of use. We thought about the telecom sector, because there was a niche that we could fill", says Bezlov. At the time he is a university student in Warwick, Great Britain. This is where the two other co-founders, Dimitar Raynov and Vassil Rabuchiev, come from.
The team of five started working on so-called digital twins, that could be useful to any company that works with physical assets. But logically, the focus is on telecoms - companies with great financial power, fast adaption to new technologies and a sector where costs can be optimized.
"We give them a service that helps them save money. If you want to inspect a tower with equipment, you need people. And not only any kind of people, but certified engineers and climbers. If you are going to touch anything, you need at least three people, because of the high voltage risk. All of this we do in thirty minutes with a drone, absolutely risk-free", says Mihaylov. He also points to another interesting aspect - that tower antennas are aimed mechanically, with magnets or even just "by eye".
"We are talking about equipment for about 200-300 thousand leva, that is being set up without any calculations, so you lose about 10% of the signal just because something is 5 or 10 degrees to the left. We guide this whole process and make radio planning", says Mihaylov.
The service is subscription based, with the price gauged according to the number of locations and inspections in a year. Data is crunched by the company itself and the clients have access to the platform where they can see all their towers.
Bezlov says that they work mainly with telecoms because this is where the biggest added value is. To him it makes sense for MYX to focus on the specific niche while it is growing. At the same time, however, digital twins could be used in any industry, including agriculture and oil. For example, MYX has a rather strange project in its portfolio - mapping every three in the Borissova garden in Sofia.
Telecoms here and telecoms there
At the end of 2021 MYX has one big client among the telecoms in Bulgaria - A1. The startup is already talking with the two other players, Yettel (formerly Telenor) and Vivacom. The Bulgarian market turns out to be an interesting one for the company, because most of the equipment towers in the country are custom made.
"In the West towers are literally chosen from a catalogue, while in Bulgaria everything is custom made. Every operator has its own infrastructure, which is also different than in foreign markets. This is very interesting, because it turns out that in Bulgaria it is cheaper to have something uniquely done for you, and then these kinds of things need specific maintenance", says Mihaylov.
One of the reasons Bulgarian and foreign telecoms to turn their attention to MYX is the current upgrade to 5G networks, which means changing old equipment and buying some new stuff. "Telecoms are very fast companies for their size. They know that if you don't invest for two years in new technologies, they are out of the market", Mihaylov adds.
Demand is high not only from Bulgaria. Outside of the country the company is working with vendors of Vodafone, Ericsson and others in the UK, along with some new projects in Denmark and South Africa. When working with foreign markets, MYX lets others use their software while doing the groundwork like photos and mapping. Data processing is done by the Bulgarian company.
As confident as they sound, Mihaylov and Bezlov admit that the company is moving faster than they anticipated. "We were seven people three months ago, now we are twelve", says Bezlov. This is why they need money, and in financing their project they have taken an untraditional approach for startups.
The round before the round
In March 2021 MYX raised 350 thousand euros through bonds. 150 thousand of them are coming from the NV3 fund and 200 thousand - from private investors. This is a strange way to finance a startup, where equity investments are widely accepted as the default option, especially in early stages of a company. The goal, according to the founders, was not moving as fast as possible, but having a small round of financing before getting to another, bigger round.
"We are financed through bonds so that we can have the structure of a future deal right now. We made a round without a valuation, and the investors agreed that this was the best way to make sure we will have another round in the next two years. This is why we took the money with the motivation to find more investors. This was the most elegant way to do a deal without having a valuation", says Bezlov.
While the company still has no annual financial report (the legal entity was founded in August 2020), Mihaylov says that "if all our clients and projects drop out tomorrow, we still have runway for 12 months."
And in the next year MYX will be busy. Not only with new clients, but with initiating the process of the next round of financing. When they figure out which investor they like, they expect to have another 6 to 12 months work on the deal itself. "It is important to have meetings with investors before we are looking for money, so that we don't have to tell them "Hi, do you remember us" when the times comes", says Bezlov.
The team has a specific figure in mind - 10 million euro. This is a very big sum for an investment in a Bulgarian startup and it implies that there will be foreign venture capital firms in the round. Bezlov, however, thinks that the number is realistic, especially if the company continues its growth with the same velocity.
"It is an ambitious goal, but we see what value we add to our clients. Even if we stay only in the telecom industry, we can help each company there, save them millions of dollars and bring up their profit margins with two-digit percentages. There are only two or three other companies in the world that are in competition with us and they have taken this kind of money in seed rounds. If you want to go to Germany, the UK, the US, you need a lot of money", says Bezlov.
Even though Mihaylov says that the number of people is not fixed in their business plan, he thinks that in the middle of 2022 they will be around 20 to 30 people. "We need all kinds of people. Software developers, account managers, marketing specialists, trade people, support. This technology is just emerging and we have the sheer luck to be well-positioned in time. In five years, this will be an established, not an emerging technology, so we need to go fast now."