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5 Insider Stories From Russia's Fledgling Start-Up Market

Published: June 9, 2014 (Issue # 1814)



  • Alexander Galitsky, co-founder of Almaz Capital Partners.
    Photo: Almazcapital.com

  • Igor Ryabenky is a business angel with 20 years of experience in helping IT, biotech and Internet start-ups.
    Photo: For SPT

  • Dmitry Chikhachev, a managing partner at Runa Capital.
    Photo: Facebook.com

  • Max Tsyplyaev, founder, president and chief of software companies Acronis and Comindware.
    Photo: Slickjump / Facebook.com

  • Sergey Gribov is a partner at venture fund Minerva Capital.
    Photo: For SPT

Start-ups, business angels and venture funds these terms have become part of the Russian language, although just a few years back they were almost completely absent from the local dialect.

High-tech business in Russia is expanding rapidly and being part of it is now considered "cool" as thousands of young entrepreneurs flock to venture funds with ideas and hopes of one day making their first million dollars. However, its growth has been stunted by excessive bureaucracy, the tiny domestic market for high-tech products and the slim chances of launching an IPO on the Moscow Exchange. The political standoff between Russia and the West over Ukraine has made things worse still.

According to a recent joint report prepared by the Russian Venture Company and the PwC Center for Innovation and Technology, the amount of "exits" from Russian start-ups when a venture fund sells its stake in 2013 amounted to $2 billion, fives times more than in 2012. The volume of investments channeled into the sector in Russia in 2012 was greater than that received by Israel, a developed venture industry country. More than 80 percent of all investment last year, or more than $600 million, went into the IT sector, as was the case in 2012.

The results are encouraging, but the few who have been in the industry long enough to have set up companies and sold them on for a hefty sum are not so optimistic about its short-term prospects.

The St. Petersburg Times has asked several Russian businessmen who are prominent in the start-up industry to share their views on the current investment climate in their sphere. The interviews have been edited for length and clarity.

1. Alexander Galitsky, co-founder of Almaz Capital Partners. Founded in 2008, it has raised more than $100 million and invested in companies such as Yandex, Nival and Parallels:

Russia is not among the global leaders in innovation technology, but no country is currently capable of rolling out products that have been fully conceived and manufactured within its own borders, and that includes military hardware.

Technological integration is highly developed, so Russia needs to find its own niche where it can make its own contribution to the world of innovation technology.

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ALL ABOUT TOWN

Thursday, Aug. 28


Learn more about the citys upcoming municipal elections during the presentation of the project Road Map for the Municipal Elections being presented this evening in the conference hall on the third floor of Biblioteka at 21 Nevsky Prospekt. Steve Kaddins, a coordinator for Beautiful St. Petersburg, which gives residents an online forum to lodge complaints about infrastructure problems in the city, will be on hand to answer any questions. The meeting starts at 7 p.m. and is open to all.



Friday, Aug. 29


Park Pobedy will feature the sights and sounds of the world outside of Russia during the Open Art International Festival today. Taste foreign cuisine, learn how to make tea like the Chinese or relax in a hammock during the free event. Although entrance is free, you must register beforehand if you wish to attend.



Saturday, Aug. 30


Break out the tweed and channel your inner Englishman during the English Hunt Picnic this afternoon organized by the Bagmut stables from Krasny Bor in the Leningrad Oblast. Equestrian stunts, English archery and classic hunting fashion will all be available to visitors hoping to live like the characters in Downton Abbey if only for a day. Tickets for the event cost 7,900 rubles ($219.40).


Bookworms will have their chance to swap out well-read classics for something new for their bookshelves at Knigovorot, a free book exchange that will be held in the Yusupov Garden on Sadovaya Ulitsa today. Come for the chance to get a new book or take the opportunity to discuss the literary merits of your favorite authors with fellow fans.



Sunday, Aug. 31


The Neva Delta International Blues Festival wraps up this afternoon on Vasilevsky Island with a concert featuring not only some of Russias best blues bands but international stars as well. Admission is free for all three days of the festival, which begins on Aug. 29, and the shows starting at 5 p.m. each day.



Monday, Sept. 1


Today marks the beginning of Lermontov-Fest, a fall festival celebrating the life of one of Russias most remarkable poets who, in a fate eerily similar to Pushkins, was killed in a duel at the age of 26. Organized by the Lermontov Library System, the next several months will see art exhibitions, concerts and public lectures focusing on the Lermontovs short yet prolific career. Check the Lermontov Library Systems website for more details.



Tuesday, Sept. 2


Join expats and practice your Russian during the Russian Clubs weekly meetings every Tuesday night at 7:30 p.m. The club is free to participate in although you need to be a registered member of Couchsurfing.



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