Photonics startups to watch
by Freya Pratty
Good morning John,
Sofia’s startup scene has a new swagger. Ask anyone why, and they’re likely to namecheck one company: EnduroSat.
Founded over a decade ago, the Bulgarian satellite developer has enjoyed a sudden upsurge in capital and reputation across the last two years. It’s raised over $300m across 2025 and 2026 and counts Lux Capital, GV, Omnes, and Giant among its backers. By all accounts, international VCs don’t come shopping in the country’s capital all too often, so it’s a welcome sign.
For a long time, Bulgaria’s ecosystem had looked to fintech Payhawk, its first unicorn, as its shining light. There’s also smart home device maker Shelly, which Schneider Electric has agreed to buy for €1.2bn. Should the deal close, many here think it would strengthen the case for investing in local companies.
Attendees at the country’s Crossroads startup conference – held this year at local football club CSKA Sofia’s new stadium — tell me there’s also more VC capital washing about the ecosystem today.
“Right now there is a lot of fresh capital in Bulgaria and in the region from VCs,” says Sofia-based M&A lawyer Nikoleta Racheva.
Part of that comes from the latest round of EU-backed funding through Bulgaria’s state-owned Fund of Funds, she says, which last year selected three fund managers to distribute new capital. The firms started investing the funds this year.
“There are a lot of startups being founded and a lot of big deals,” says Ivan Danielov Ivanov, cofounder of Bulgarian AI security startup Stihia (though he admits uncertainty over the future of the AI industry has gripped Bulgaria’s tech scene as much as anywhere else).
Sofia’s ecosystem has also benefited from the city’s current mayor, Vassil Terziev, who has organised hackathons, says Ivanov. Before entering local government, Terziev cofounded tech firm Telerik, and did a stint as a VC.
Despite the positive signals, Bulgaria remains a small ecosystem. Its startups have collectively raised €197m in 2026 so far, a 25% increase on 2025, according to Sifted data. In comparison, those in Denmark – which similarly is home to roughly 6m people – have raised €819m so far this year.
Bulgaria still loses its talent to larger tech hubs overseas. The one good thing about that is they often become keen champions for their homeland.
One example of that is Bogomil Balkansky, a US-based Bulgarian partner at Sequoia. Several here credit him with introducing young Bulgarians to American investors.
The remaining question for Sofia’s startup world is whether the excitement around a few big names can help lift the next crop.
Elsewhere today:
56 companies on this year’s Sifted 250 are AI-native, more than double last year’s 25
Three of them cracked the top 10: cyber unicorn Aikido Security, legaltech Lawhive and student jobs marketplace Huzzle.com. Across the whole list, 1,713 investors backed this year’s 250 companies, with Notion Capital and Accel the most active, on 10 portfolio companies each. Download the report, sponsored by Zoom, to see the full picture.
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The AI boom is facing a physical-world challenge. As more and more data centres are built globally, the chips, cables, and components inside them are struggling to keep up with the volumes of data and speed of processing that ever-more capable AI systems require.
Photonics is fast emerging as one of the most promising approaches to breaking that bottleneck, with photons (which are particles of light) able to carry data faster and with less energy than conventional electrical methods.
But which companies are flying the flag for Europe?
From a company in Neuchâtel, Switzerland, building a photonic chips foundry, to a startup in London developing the photonic chips we need for AI inference, Sifted polled VCs for the photonics startups to watch in Europe, with one caveat: they couldn’t name portfolio companies.
Picks include:
🇬🇧 Luminetic, a London-based startup developing a fully digital optical processor that uses light rather than electrical signals to perform computations.
🇳🇱 Aluvia Photonics, based in Enschede, The Netherlands, which is building a chip platform on aluminium oxide, as opposed to the silicon, silicon nitrate, or indium phosphide typically used.
And for more startups to watch, see:
If you’d like to submit a deal, let us know.
London-based Easol, a platform to help experience businesses manage bookings, payments, and customer engagement, raised $20m in Series A extension funding from Y Combinator, TIger Global, Foundation Capital, FMZ Ventures, Notion Capital, and Eight Roads. It also secured $10m in debt funding from Viola Credit.
London-based Ares Intelligence, which uses employee insights to create AI adoption strategies for businesses, raised €2.9m in funding. Creandum and Lakestar co-led the round.
Stockholm-based Pixel Systems, which develops software that detects AI-generated content, raised €2.7m in seed funding. Unconventional Ventures led the round.
Madrid-based Talky Labs, which automates financial processes, raised €1.5m in pre-seed funding from HelloWorld, Silence VC, and Motive Force.
Pisa, Italy-based YK-Robotics, which develops industrial robotic arms and automation solutions for manufacturing and production environments, raised €1m in seed funding. Draper B1 and First Drop co-led the round and were joined by investors including BStartup, Coben Ventures, and Elephant Capital.
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