Bulgarian software company Codery has acquired its local peer Devision. The deal was recorded in the Commercial Register at the end of November, with Codery acquiring 100% of Devision's shares. The acquisition was funded through the investment that the Silverline fund made in Codery in 2024.
Both companies provide software services but do not follow the traditional outsourcing model. Codery has developed a platform that enables foreign companies looking to establish a tech team in Bulgaria to directly select software specialists and start project work. Unlike traditional outsourcing firms, the client company works directly with the hired specialists but pays Codery, which acts as the official employer under the employer of record model.
Filip Balkanski, founder and CEO of Codery, told the Capital Weekly that the two companies will fully merge operationally within a year. In the meantime, they will continue to operate as two separate brands.
The financial details of the deal are not disclosed but both companies generate significant revenue. Devision reported 5.8 million levs (2.9 million euro) in revenue for 2023, with a profit of 472,000 levs. By the end of 2024 it had 35 full-time employees. Codery's revenue for 2023 was 1.9 million levs but according to Balkanski, it grew to 9 million levs in 2024, with plans to double in 2025, factoring in Devision's revenue.
The total workforce of the two companies is approximately 100 employees, with 90 of them holding technical roles such as developers, designers and project managers.
Market consolidation
Talks between the two companies began in early 2024. According to Balkanski, both leadership teams quickly realized they could work well together, leading to the acquisition idea. He added that Codery aims to consolidate the software service market by acquiring smaller companies in Bulgaria and, in the future, across Southeastern Europe.
"The market is highly fragmented, with many players, but most are small-scale. This creates an opportunity for consolidation through a well-executed acquisition strategy, optimizing the entire industry. Not just in Bulgaria-Southeastern Europe has around 11,000 IT service companies, 75% of which have fewer than 50 employees," said Balkanski.
Petar Nenov, a former co-owner of Devision holding a 33% stake alongside partners Hristo Proynov and Branimir Borisov, stated that the deal was a logical step for Devision as it allows the company to offer better services to clients and more engaging projects to employees. Both sides agree that scaling up will enable them to attract larger corporate clients and Balkanski does not rule out the possibility of working with public sector clients as well.
Codery's long-term goal, according to Balkanski, is to become the leading company in its sector in Bulgaria. "We must be able to offer a broader range of services to our clients. Any company looking to establish a presence in Bulgaria should see us as the best option, without any competitor being able to offer what we do," he said.
More acquisitions on the horizon
Balkanski's strategy for Codery involves continuing to acquire smaller companies. He emphasized that Codery is constantly evaluating acquisition opportunities, which sets it apart from other firms. "There will definitely be new deals in 2025 and 2026. These are already planned," he stated, without elaborating further.
For now, the company is not seeking additional funding. In 2024, the Silverline fund, led by Evgeni Angelov and Nikola Dunchev, invested 2 million euro in Codery. Additional co-investors brought the total to 2.6 million euro, with Silverline now holding a 43% stake in Codery.
"Sooner or later, we will raise another funding round but it's not something we are actively planning right now. Over the next three to four years we expect to complete several more acquisitions," Balkanski added.
Bulgarian software company Codery has acquired its local peer Devision. The deal was recorded in the Commercial Register at the end of November, with Codery acquiring 100% of Devision's shares. The acquisition was funded through the investment that the Silverline fund made in Codery in 2024.
Both companies provide software services but do not follow the traditional outsourcing model. Codery has developed a platform that enables foreign companies looking to establish a tech team in Bulgaria to directly select software specialists and start project work. Unlike traditional outsourcing firms, the client company works directly with the hired specialists but pays Codery, which acts as the official employer under the employer of record model.
