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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

Wednesday, July 23


SPIBA’s Legislation & Lobbying Committee invites everyone interested in the practical aspects of courts and procedural law to today’s Legal Debating Club at 9:30 a.m. at the Mertens House, 21 Nevsky Prospekt, office 506. Visit spiba.ru for more details.


Take advantage of the sunny summer days and participate in Beach Games 2014, which runs through July 27 in Sestroretsk’s Dubki Park.



Thursday, July 24


Liliana Modiliani, a well-known Russian stylist, will talk about choosing clothes that fit during her lecture at 7 p.m. at the Pryamoy Efir art club, 13 Viborgskoe Shosse.



Friday, July 25


Discuss Russia’s economic and political prospects for 2014 during a Business Breakfast organized by SPIBA at 9.30 a.m. in the Bank Saint-Petersburg office at 64


Malookhtinsky Prospekt.


Start your weekend with adorable miniature pigs at the Squealing Pig festival at 7 p.m. this evening in the Karl & Friedrich restaurant, 15 Iozhnaya doroga, on Krestovsky Island.



Saturday, July 26


Hundreds of brand-new and retro cars, drag and drift shows, test drives and karting are planned for the Avtobum-2014 festival, which will take place in front of the RIO shopping center at 2 Fuchika Ulitsa.


Participants in today’s SaniDay Summer competition will impress visitors with their hand-made, unusual and hilarious boats, which will race at the Igora Resort near the 54th kilometer on Priozerskoe Shosse.


Metro Family Day will include both serious lectures for adults and master-classes for children, making the event interesting for the whole family. To participate, come to Kirov Park on Yelagin Island.


Photography will be the focus of today’s Photosubbota, which features lectures by famous photographers, meetings with photo schools and studio representatives, and participation in a photography competition. The event starts at noon at Petrokongress, 5 Lodeynopolskaya Ulitsa.


If you like cycling, make sure to visit the Za Velogorod Festival with its retro bike exhibition, market and live music. The second round of the Leningrad Criterium race will also take place during the event at Petrovsky Arsenal in Sestroretsk.



Sunday, July 27


Navy Day will be celebrated with a weapon and military transportation exhibition, self-defense master classes and concerts. The event starts at 1 p.m. in the 300th Anniversary Park of St. Petersburg.



Monday, July 28


Don’t miss a chance to see the latest achievements in robotics during the RoboDom interactive show, exhibiting more than 150 robots. The show will be at BUM center, 22/2 Gzhatskaya Ulitsa, until Aug. 3. The entrance ticket costs 350 rubles ($10).



Tuesday, July 29


A video of a Queen concert from 1986 will be shown today at 8 p.m. in Yaschik, 50/13 Ligovsky Prospekt.



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