Page 21 - bne Magazine Apri20

bne April 2020 Companies & Markets I 21
The role of Ukrainian funds remains modest, notes the report. “While most Ukrainian investors get involved only in seed- stage rounds, few participate in Series A deals. Thus, the better part of Series A funding comes from international investors. Ukraine-born companies typically build a physical presence
in their target markets (USA/EU) and raise Series A-C there.”
What’s more, Ukrainian funds tended to invest less in 2019 than in previous years,” as most of them were waiting to raise a second fund, having distributed their first one.”
A dual dimension
Thus, last year’s evolutions confirms the dual dimension of
the Ukrainian market. On the one hand, Ukraine continues
to generate globally-successful tech startups, which manage
to raise impressive amounts after moving their main office to their target markets – essentially the USA and Western Europe – while maintaining R&D capacities in their country of origin. But, on the other hand, investment volumes in purely domestic terms (if excluding Ukrainian startups having moved abroad) remain very low: they range in dozens, not hundreds, of millions of US dollars per year.
This duality does not characterize only Ukraine: it is
a challenge in many countries across Central and Eastern Europe (CEE). In spite of recent achievements in terms of ecosystem development, these countries still fail to provide
Russian e-commerce leader Ulmart goes bust after three years of shareholder infighting
Tamas Szilagyi in Budapest
Leading Russian e-commerce store Ulmart has filed for bankruptcy after its owner got ensnared in legal problems that led to his arrest.
In a riches-to-rags story, the St Petersburg-based online store was growing fast and told bne IntelliNews in an interview in 2015 it was planning an IPO in 2016.
Founded in Russia’s northern capital, Ulmart was Russia’s largest online retailer at the time specialising in consumer electronics, with 2014 sales estimated at $1.3bn.
their native startup entrepreneurs with sufficient reasons to stay in their home country once they have reached a certain level of development.
M&As in the software development industry
AVentures Capital’s Dealbook pays due attention to mergers and acquisitions in the field of software development. A series of deals took place in this thriving industry last year, reflecting “a global consolidation trend among software development outsourcing companies,” according to the report.
Notably, in late 2019, a recently created company called InSoft Software bought a controlling stake in Rademade (Kyiv)
while increasing its stake in Rozdoum (Kharkiv). Almost simultaneously Beetroot, a Swedish IT company with offices in five Ukrainian cities, acquired two other companies: Ukrainian Onlinico and Swedish Aducera.
Founded in 2012, AVentures Capital a major tech investment fund and M&A advisory from Ukraine. With over 20 companies in its portfolio, AVentures Capital targets tech entrepreneurs from Ukraine and other CEE countries to fuel their global expansion while leveraging on local R&D capacities.
A Ventures Capital’s DealBook has been published every year since 2016, with participation from Ukraine Digital News. The report covers only the deals, which were announced publicly.
Dmitry Kostygin, co-founder of Ulmart, was jailed on charges of defrauding Sberbank. Once the largest online store in Russia, the company has filed for bankruptcy after years of infighting amongst its shareholders.
Part IKEA and part Amazon, Ulmart was an early success story in Russia’s burgeoning online business. In its best days, the company had nearly 50 urban and suburban fulfilment centres deployed across Russia. Selling virtually everything from electronic devices, to home appliances, to books and music, Ulmart topped e-commerce rankings in 2013-2016, generating up to $820mn in total sales revenues.
The company said that the 2014 crisis was a boon as bargain- hunting shoppers turned to the online store for deals after income growth stopped.
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