Page 23 - bne IntelliNews Georgia country report November 2017

Eastern Europe
November 11, 2017 www.intellinews.com I Page 23
Spotify — In 2011 Spotify raised no less $100
mn from a consortium of investors which included DST, Kleiner Perkins and Accel.
Uber — The shareholder structure of this startup is a nest of Russianbnnaires, namely Alisher Usmanov, who discreetly invested several dozens of mns of US dollars in 2015, Ziyavudin Mago- medov, whose fund CVC presents the Uber stake as its “first trophy asset,” and Mikhail Fridman, which made a “strategic investment”of $200 mn in the company via his fund Letter One in early 2016. But not only that. In Putin’s homeland, the infa- mous US startup is making friends with two top Russian companies. One of them is Sberbank, the national savings bank, with which Uber agreed “to explore the co-development of financial technolo- gies with global potential” some time ago, prior to accepting a capital injection from Sberbank’s cor- porate fund SBT Ventures. Uber’s second Russian accomplice is Yandex, the local Internet search giant which belongs to its founders and NASDAQ investors but not yet, most suprisingly, to the Russian state. The two companies have plans to merge their taxi businesses in Russia and several neighboring countries.
Business interests or Kremlin plot?
The emergence of Russian investors on the global tech venture scene started in 2009, when DST acquired a stake in Facebook for
the first time. The deal, completely unique at that time, was seen by many as desperate and vulgar, Wired recalled: “On the one hand, DST was buying a small stake in Facebook, valuing the entire company at $10bn, on the other, Facebook was debasing itself by taking Russian money. Russian money!” In the following years, a variety of Russian, or Russia-connected funds got involved in countless tech investment deals across the world.
Surely some of these Russian investors do have connections with their government — and it can- not be ruled out that their motivations in conduct- ing certain deals were not exclusively business- oriented. But Kremlin inspiration, if any, has
probably been the exception rather than the rule. In particular, seeing the Kremlin’s hand in DST’s investments in Facebook is probably more
a speculation than a reflection of reality.
As a matter of fact, the first DST funds were not only backed by Russian investors, but also by such organizations as Tencent Holding (China), Naspers (South Africa), Tiger Global (USA) as
well as Goldman Sachs, to which DST Global was closely connected. Thus Milner’s fund can legiti- mately remind that “Mr. Usmanov was just one
of 50 passive investors in DST Global’s fund that invested in Facebook, and VTB Bank was one of 40 passive investors in the DST Global fund that invested in Twitter.” “Money is fungible. You can’t just say that this specific dollar went all the way to Facebook,” Milner added in an exchange with The New York Yimes. At least from a formal point of view, this is true.
DST Global is also formally right when it argues that “all [its] investors — including Mr. Usmanov, VTB Bank, and a number of sovereign wealth funds from all over the world — are passive investors.” Indeed, while committing funds to be invested by DST Global, these backers are not supposed to have any influence on the fund’s investment strategy.
Some other facts make the theory of a political, Kremlin-inspired motivation in DST’s investments even more dubious: In 2009-2011, when the fund invested in Facebook and Twitter, the state of Russian-American relations was far from the current hysteria. It might be that the Kremlin wanted to lend a helpful hand to Milner by having a state-backed bank provide him with some funding, but it sounds less likely that Putin or Medvedev, at that time, designed a politically- motivated plan to gain influence on US social networks via DST.
DST Global was a passive investor in Facebook and Twitter: with tiny stakes in their capital, Mil- ner’s fund did not have any board seats, and claims not to have had any influence on these