28 апреля 2016 г.

CFA Association Russia held a business breakfast on venture investments

On April 28, CFA Association Russia held a business breakfast at Kazan Bar in downtown Moscow. Offering their views on the present and future market for venture investment in Russia were Oskar Hartmann, founder of KupiVip, Fast Lane venture fund and main investor in CarPrice, and Pavel Bogdanov, general partner in Almaz Capital. 

Oskar Hartmann who started developing businesses at the age of 17 by sending 25 packages across Germany, talked about the secrets of his companies’ success. This businessman frequently acknowledged that he was not an innovator. Rather, he would place himself among distributors. “I’m not inventing anything new, I’m just spreading technology to places that don’t have it yet. I make a high-quality copy of something valuable and useful and transfer it to Russia.” 

In 2004 he came to Russia with the idea of creating online shops based on the concept of value for money, which had already been successfully applied in the West. Contrary to the stereotype widespread among Russian entrepreneurs that Russia has a special path, and foreign business models just don’t survive in this country, Oskar Hartmann was certain that any idea working in three markets and having a capitalization of 1 billion+ could be successfully applied in Russia. The example of KupiVip serves as the best confirmation of this: in its first year, the company made 6.3 million in revenues, in the second year 28 million, and in the third and fourth years it generated 52 and 117 million dollars, respectively. As Hartmann admitted, “There are people who create a business, and there are businesses that create people – that’s KupiVip.” In 2010 Russia took first place internationally in the online-shopping market.

As he sees it, today there is a potential for 20 other internet businesses to develop with a capitalization of US$ 1 billion+. The businessman decided to build all these businesses, and in 18 months he founded 18 companies. Today many of these businesses have been successfully sold to international companies, including Amazon. As Hartmann put it, “The main business killer is not the state and taxes, it’s people themselves who don’t want to create something and destroy the idea in the bud, or a market that just doesn’t need the given business.”

Pavel Bogdanov talked about Almaz Capital, the most famous venture fund operating in the former Soviet Union for the past eight years. The fund focuses mainly on Eastern Europe, where there are fine engineers and programmers – the heirs to Soviet technical schools – but not many managers and experts in the field of venture capital. Almaz Capital works with a fringe funds model. This technique was invented in Israel and involves a business expanding to a new market while maintaining all its technology in the place it was founded.

The business breakfast ended with a Q&A session, where members of CFA Association Russia and their guests were mainly interested when Russia might stop copying technologies and begin to create its own. Oskar Hartmann mentioned such companies as Abbyy, Mail.ru, Yandex, Viber, Parallels, etc., that have a fine reputation in the West and also demonstrate a good example of local innovation.

Oskar Hartmann remains optimistic about this country: “Russia contains only 2% of the world population, but it creates much more technology and exceeds its human potential by 2.5 times. Of course, we have greater things to strive for. Thus, Israel with 0.1% of the world population somehow outpaces us in innovation. We should therefore continue working on improving our indicators.”