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16 I Companies & Markets bne May 2021
bne:Tech
This former Russian deputy minister is now worth $10bn after NASDAQ IPO
Adrien Henni of East-West Digital News in Moscow
Anew Russian techbillionaire emerged on the NASDAQ with the SPAC-enabled IPO of Arrival, a company touted as a game-changer in the electric car industry.
Born 42 years ago in the Soviet republic of Georgia, Denis Sverlov founded his first company – an ERP integrator called IT Vision – in 2000, immediately after graduating from university in St. Petersburg. He sold it three years later to a system integrator, East-West Digital News (EWDN) reports.
In 2007, Sverdlov was among the co-founders of Scartel (Yota), one of Russia’s most remarkable technological successes of the late 2000s and early 2010s. With support from Sergey Chemezov, the CEO of Rostec and one of Putin’s oldest friends, Yota pioneered the Russian Wi-Max and LTE markets, deploying the world’s first LTE advanced network in Moscow.
The company also launched an innovative dual-screen smartphone. Sverdlov was one of the two authors of the international patent for this device – which did not turn out to be commercially very successful, however.
Scartel’s telecom business was finally acquired by Megafon, one of Russia’s telecom majors, while the smartphone manufacturing branch was sold to Rostec and a Hong Kong company.
From business to government
In 2012, the businessman turned government official, becoming Deputy Minister of Communications and Mass Communications in charge of communications, internet and e-government projects.
Sverdlov saw in his work “a unique chance to create an efficient regulation system for industry development”; however, he left this position a year later, in order to comply with new legislation that did not permit government members to hold assets abroad.
In 2014, Sverdlov briefly headed a Rostec subsidiary called Roselectronics (Rosel) before his career took a new direction. Like many other top Russian tech entrepreneurs – from Sergey
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Beloussov, to Andrey Andreev, to Ratmir Timashev, to name just a few – Sverdlov found abroad his way to a larger fortune.
From Moscow to Oxfordshire
In 2015, the serial entrepreneur moved to London and launched a $500mn start-up fund called Kinetik.
The fund’s first investment went to Charge – the original name for Arrival – a company founded and headed by Sverdlov himself “with the idea to reinvent the way automobiles are made.” Charge first established itself in Enstone, near Oxford, at the site of the Lotus Formula One racing team. Sverdlov said this location made it easier to hire local top automotive engineers.
Sverdlov’s second creature was Roborace, “the world’s first extreme competition of teams developing self-driving AI.” Wired has described this business as promoting “a new sport where teams pit their artificial intelligence against competitors.” Teams differentiate themselves neither by the
“Arrival has now positioned itself as a full-fledged EV manufacturer,
“challenging the 100-year old automotive production process”
cars they use (which are identical electric cars) nor by how well competitors can drive – but how well they can code.
Charge (Arrival) initially aimed to develop electric powertrains for trucks and buses – combining an electric battery and a one-litre fuel generator, resulting in total range of about 700 km for commercial vehicles. Six years later, Arrival claims to have designed “best-in-class [electric vehicles (EVs)] with an exceptional user experience that are priced competitively with fossil-fuel vehicles and have a substantially lower total cost of ownership than both fossil fuel and electric variants.”