Wired highlights 10 Russian startups but gets it wrong with rosy business predictions

In a series on Europe’s “hottest startups,” the UK edition of tech magazine Wired published earlier this month a selection of 10 Russian startups. These included peer-to-peer publishing platform Gitoon, e-commerce intelligence platform Ometria, “rephotography” app publisher Timera, slideshow assistant app Penxy, music-streaming service 10tracks, taxi app publisher Wheely, driving navigational system WayRay, video game marketplace Gameslooper, educational program comparison engine Choister, and autopilot system developer RoboCV.

Wired — which says nothing about its selection criteria — presents the Russian startup scene quite optimistically. Citing perhaps outdated statements by Russian venture capitalists, the UK publication envisions an “increase in private and international investors on the Russian venture market” and “an average GDP per capita growth of six percent per year until 2015.”

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TMT Investments_new

TMT Investments invests in Anews, avoids share dilution in Adinch and exits from The One Page Company

Asserting itself as one of the most active Russian-backed funds operating internationally, TMT Investments announced during this month the completion of two investment deals, in addition to a small exit.

The fund, which usually invests just a few hundred thousand USD in each project, has injected a hefty $1 million in Anews, an international global news-reading service with a built-in behavioral advertising network. In exchange, TMT is set to receive 9.09% of the startup’s fully diluted equity capital. TMT’s investment came as a part of a $3 million round which involved other unnamed investors.

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Arkady Volozh

Yandex founder Arkady Volozh moves to global role in senior management shake-up

Earlier this week Russia’s online search giant Yandex announced significant changes this month at the senior board level, which will come into effect from September 1.

Alexander Shulgin, currently the group’s Chief Financial Officer, has been appointed Chief Operating Officer of Yandex’s Russian business. Greg Abovsky will be promoted to Chief Financial Officer to replace Shulgin. Yandex founder Arkady Volozh will remain company CEO, with overall responsibility for the development of Yandex’s products both in Russia and abroad.

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FBI examining whether Russia is tied to JPMorgan hacking

Russian hackers attacked the U.S. financial system in mid-August, infiltrating and stealing data from JPMorgan Chase & Co. (JPM) and at least one other bank, an incident the FBI is investigating as a possible retaliation for government-sponsored sanctions, according to two people familiar with the probe.

The attack resulted in the loss of gigabytes of sensitive data, said the people, who asked not to be identified because the probe is still preliminary. Authorities are investigating whether recent infiltrations of major European banks using a similar vulnerability are also linked to the attack, one of the people said.

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Prayer mat

Electronic prayer mat invented in Dagestan

A startup from Makhachkala in Dagestan, southern Russia, has come up with an out of the ordinary new product. Developer Eldar Klyichev has designed an electronic prayer mat, which helps Muslims to keep track of rakats, the ritual movements and words used during Islamic prayer.

The electronic prayer mat is equipped with touch sensors which help users not to lose count during prayers. If a worshipper makes a mistake, forgetting the order or changing position at the wrong time, the sensors begin to vibrate, helping them to realise their mistake without disturbing the ritual.

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Russian money

Russian pension funds to invest $1 billion in venture funds and innovative companies

In a confirmation of the country’s commitment to developing new technologies, the Russian government announced that a fraction of the total assets of the country’s pension savings funds will be invested in the shares of venture capital funds, as well as in securities and the financial instruments of high-tech companies.

Prime Minister Dmitry Medvedev has instructed the Central Bank, the Ministry of Economic Development and the Ministry of Finance to prepare a proposal by November 1 for the investment of pension savings in high-tech and venture capital projects.

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Russian subsidiary of Poland’s Asseco launches division in Crimea to serve local banking sector

Banking and finance software developer R-Style Softlab, based in Russia and owned by Polish company Asseco, is opening a new division in Crimea. Its office will be in Sevastopol.

The department will specialise in software development for the banking sector, particularly banks located within Crimea and nearby regions. The company expects that by the end of the year at least 50 Russian financial organisations will have opened up offices on the peninsula, all of them potential clients.

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Russia emblem

“We are aiming for total IT sovereignty in Russia,” says Russian Minister

Communications and Mass Media Minister Nikolai Nikiforov has announced that “no quicker” than in three years the ministry plans to develop such a strong IT sector that the country no longer needs foreign software.

“We are aiming for total IT sovereignty in Russia. And it’s achievable in principle. Russia has always been renowned for its programmers,” the Minister stated at a youth forum held in Sevastopol, Crimea, earlier this month.

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mail.ru group

Mail.ru Group paid $345 million for its 12% stake in VKontakte

In its accounts for the first half of 2014, Mail.ru Group has disclosed the sum it paid in April of this year to Ivan Tavrin for 12% of VKontakte, Russia’s leading social network also known as VK.com. The stake cost the group around $345 million, valuing the company at almost $2.9 billion.

The LSE-listed Internet group thus owns 52% of Vkontakte. The remaining 48% belong to Russian investment fund United Capital Partners (UCP), which acquired its stake in controversial conditions in 2013.

Платки и палантины

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UnionPay and JCB to spearhead Asian payment push in Russia

While Russia is shifting a part of its business focus from Western countries to alternative partners, Asian bank card giants UnionPay and JCB have expanded initiatives to conquer the Russian market.

China’s UnionPay, which entered the market in 2007, claims to be accepted by over 100,000 POS terminals and more than 30,000 ATMs in Russia, and that a total of 45,000 UnionPay cards have been issued in Russia.

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East-West Digital News is published with the support of:
  • Higher school of economics
  • The Institute for Statistical Studies and Economics of Knowledge
  • Russian Venture Company
  • Territory of tomorrow foundation