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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

Saturday, Oct. 25


AVA Expo, the eighth edition of the event revolving around all things pop, returns to Lenexpo this weekend. Geeks, nerds, dweebs and dorks will have their chance to talk science fiction and explore a variety of international pop culture. Tickets for the event can be purchased on their website at avaexpo.ru.



Sunday, Oct. 26


Zenit St. Petersburg returns home for the first time in nearly a month as they host Mordovia Saransk in a Russian Premier League game. Currently at the top of the league thanks to their undefeated start to the season, the northern club hopes to extend the gap between them and second-place CSKA Moscow and win the title for the first time in three years. Tickets are available at the stadium box office or on the club’s website.



Monday, Oct. 27


Today marks the end of the art exhibit “Neophobia” at the Erarta Museum. Artists Alexey Semichov and Andrei Kuzmin took a neo-modernist approach to represent the array of fears that are ever-present throughout our lives. Tickets are 200 rubles ($4.90).



Tuesday, Oct. 28


The Domina Prestige St. Petersburg hotel plays host to SPIBA’s Marketing and Communications Committee’s round table discussion on “Government Relations Practices in Russia” this morning. The discussion starts at 9:30 a.m. and participation must be confirmed by Oct. 24.



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