— When did you invest in Russian business for the first time? Was it a positive experience?
— First investment of e.ventures in the Russian market was Darberry back in 2010. This is still one of the most successful investments for us in the whole Russian portfolio.
— How and when did you get the idea to invest in the AdMoment.ru project? How much did you invest in the AdMoment.ru project? How do you find partners in syndicated investments?
— The AdMoment team were our entrepreneurs in residence in Hamburg. They were looking for their next venture opportunity and decided to have a look at the Russian market. After spending a few months at Fast Lane Ventures, the founders decided to create mobile RTB-focused demand side platform AdMoment, where we supported them first with debt financing, which later converted into equity. Our total current investment in the company is under two million US dollars.
As for syndicated investments this is always a function of which partner suits best for the concrete startup. Several factors should coincide for a syndicated deal: a partner should be interested in the provided opportunity, his experience and portfolio should be in line with core startup business activity and, of course, there should be a good working relationship between us, syndicating VC and the startup team.
— Which of the Russian projects you invested in is the most successful?
— We are very much in favor of NGINX, the world's fastest web server. The service is already supporting operations of such giants as Groupon, WordPress and Facebook, helping them to cope with large traffic volumes. Now the company is working on releasing new paid products. Hopefully we will hear more about their success soon.
— What areas of Russian start-up businesses are the most attractive?
— This is a tricky question: the attractiveness of the Russian tech space has changed since 2009: Many niches in e-commerce have their leaders (for example, shoe e-commerce) and some niches like e-commerce of child-related products still suffer from weak unit economics, making them less interesting for investment from our point of view. If we take the current trend in segments of interest on the internet, the Russian market still finds itself at a relatively low-tech level and the majority of people just would not buy things like JawBone bracelets. What we do very much believe in is Russian tech talents, namely developers with an unconventional approach to and interest in technologies and programming: we do expect innovations in programming infrastructure, perhaps 3D printing, advertising technologies.
— How do you communicate with the AdMoment.ru team? How often do you come to Moscow?
— Since the team operates from Moscow, we are quite often in touch with them, doing regular meetings on a monthly basis.
— How do you see the situation in the mobile advertising industry?
— We estimate the segment to be quite attractive for advertisers now and especially in the future. Since smartphone penetration in Russia is constantly growing and interaction with mobile devices becomes more intensive compared to desktops, advertisers will inevitably want to be represented in mobile apps. The mobile advertising market was estimated at about 54m US dollars in 2013 and is expected to double by 2015 (eMarketer). The only slowing factor for this trend is still lack of experience of doing mobile campaigns and cautiousness of advertisers in working with mobile space, which are all attributes of a very young market.
— Is the Moscow business climate comfortable for European investors? What is your opinion on Government support for venture business?
— We would rather speak about the Russian business climate, since Moscow reflects the overall Russian situation with foreign investments.
Here we may notice that the major working conditions are there, foreign investors can get visas and it is possible to transfer money to startups without major hassle. However, there are still many factors foreign investors fear when thinking of investing in a Russian tech startup: namely, protection of rights of investors and protection of intellectual property rights. The situation is gradually improving in those directions as well; however, it may take another 10-15 years for investment in Russia to become as safe as investment in the Czech Republic or Lithuania.
Concerning government initiatives, we have seen tremendous support for the startup industry from the Russian state in the last one to two years. Here we mean multiple regional accelerators, a large seed fund of 200m USD (IIFD), and smaller funds like the Moscow Seed Fund. All these measures make it possible to support new entrepreneurs and allow the government to understand the real problems of the still very young tech sector in Russia. We believe, this course should be continued.
— What is your advice to potential foreign investors?
— Always do proper due diligence, invest with local funds and educate yourself about the particular features of the local market before investing.