On the 13th of December, a TechCrunch conference was held in Russia for the first time. It gathered about 700 participants including government representatives, major companies of Russian internet, startups, Russian and international venture funds, experts and the media.
Opening words from Mike Butcher, editor of TechCrunch Europe, cited the well-known Russian internet investor Yuri Milner from Digital Sky Technologies – now Mail.ru Group: “The future of Internet is math”. Mike explained why TechCrunch decided to come: “As Russia is math and chess country, we’re here”.
Among organisers from the Russian side were Edward Shenderovich, Managing Director of Kite Ventures, and Maria Adamian, Head of Business Incubator of Higher School of Economics, along with a lot of partners.
The format of the event was a series of interviews with key people in Russian internet and media. All the event live-streamed to TechCrunch’s site. Now all the videos can be seen here.
In the first interview Arkady Volozh, CEO of Yandex, described his company for a foreign audience. Yandex is the top search engine in Russia with 64 percent market share and revenues of about $300 million a year, 90 percent from context advertising, leaving Google in second place.
Yandex was founded in 1997 and has Alexa’s 24th spot in global rankings. It is not just a search engine – it also has Yandex Maps, Dictionaries, Photos, Blog Search, a payment system called Yandex Money and tens of other services. It doesn’t have its own social network preferring to collaborate with Facebook, vKontakte and MoiMir. The company’s headquarters are in Moscow with many offices in Russia, Ukraine and a research lab in Silicon Valley.
Recently Yandex launched multilingual search, including English, on yandex.com that could be considered as the first step towards the global market. One of the main goals for now is to become number one in Ukraine and Belarus. After a Mail.ru Initial Public Offering (IPO), it was interesting what would be the answer of Yandex – Arkady thinks that an IPO for Yandex is one of the options but he didn’t want to make specific statements. You can read here for more information about the company.
The second were two brothers, Semen and Efim Voinov from ZeptoLab, who’ve built the extremely successful game for the Apple App Store, ‘Cut the Rope’. It has more than 3.5 million paid downloads and 10 million free, reaching one million in just nine days. The game was published by Chillingo. They talked about the gameplay prototype, creating the main character of the game and how it feels to be on the top. One of the key messages they delivered was that you don’t need a big team to create something great.
Head of Ministry of the Telecommunications and Mass Communications Igor Shchyogolev highlighted in his report the idea of the united developers’ community creation: “The technology parks, serving for the creation of new enterprise support infrastructure, should become the key points”.
An actual issue for Russian startup market, “To clone or not to clone?” was discussed during the panel with Elena Masolova (Groupon Russia/DarBerry.ru) and Dmitry Stavisky (Evernote).
Elena thinks that copycatting is good schooling for entrepreneurs but you have to ‘graduate from this school’. She herself was the co-founder of Groupon clone DarBerry in March 2010, that has been sold in August to its American prototype. It was one of the crucial events in the Russian startup market because it showed the potential exit strategy for investors – selling a share to a U.S. company.
An interesting trend of startups – repatriates – was highlighted during the discussion with Oxford graduate Kirill Makharinsky and Damian Doberstein from KipiVIP.ru, a copycat of Vente-Privee.com. Oscar Hartmann, graduate of German University born in Kazakhstan, started KipuVIP.ru with partners in 2008 reaching the figure of more than 1.5 million club members. For now main investors of the startup are Accel Partners and Mangrove Capital Partners.
The question was: “Why you’ve returned to Russia to do business? Isn’t it complicated?”. But the answer was simple – it’s a big market and in internet it’s easier to succeed here. It seems that the experience gained on the foreign markets gives wonderful opportunities to start a successful business back in Russia with low-level competition and a growing internet audience.
Russian Presidential Aide Arkady Dvorkovich, a well-educated and active politician, talked about the creation of comfortable conditions for international project development in Russia. Among other things he mentioned an upcoming visa regime simplification for foreigners: the introduction of so-called startup visas.
“We really need highly qualified specialists to work and live here. The innovations are impossible without proper legislation, backing ventures, and the Russian government should be working in this direction. We are a European country and we need to have a common market with Europe”, underlined Arkady Dvorkovich.
Dmitry Grishin, CEO of Mail.ru Group (formerly DST), told the success-story of the company that recently had an IPO on the London Stock Exchange, giving it a value of about $6 billion, and talked about some plans.
Mail.ru Group owns the biggest Russian portal @Mail.ru along with its social network MoiMir (“MyWorld”), 100 percent of social network Odnoklassniki.ru, 25 percent share in the most popular Russian social network vKontakte, the messenger ICQ along with other internet assets. International assets like shares in Facebook, Zynga and Groupon were passed on to DST Global.
The investment panel focused on how attractive Russian tech products are to investors and the possibility of their shift to a global level. The Russian and foreign venture funds who were speaking were Alain Caffi (Ventech), Yan Ryazantsev (Rusventure), Igor Taber (Intel Capital), Pavel Bogdanov (Almaz Capital Partners), Mattias Ljungman (Atomico Ventures).
There was the traditional TechCrunch “Startup Battle” led by famous investor Arkady Moreynis, within which there appeared the presentations of nine carefully selected promising Russian projects: Actio.tv, Glavbot.ru, Goozzy.com, Socialcatcher.com, YamLabs.com, Speaktoit, Zingaya, Intervox and MixxMuse.
MixxMuse was selected the best by the audience.
As a conclusion, there was nothing from the startup ecosystem in Russia just four years ago but now there are plenty of events, many people involved, venture funds and examples of successful projects even on the global market.
It seems that single success-stories have turned into a flow of projects and internationalisation and co-operation would be favourable for the process.
And for sure, TechCrunch Moscow has become the key event in Russian internet internationalisation.