Kiev's IDCEE attracts investors from USA to India; Russian startups win top prizes
Once again this year, the annual IDCEE conference held in Kiev on October 18th and 19th attracted an impressive array of Internet oriented investors, startup entrepreneurs, and professionals of all kinds from far beyond Ukraine and the neighboring countries (see videos).
A rare phenomenon in such events, investors – coming from all parts of Europe and as far away as the USA and India – were even more numerous than startup entrepreneurs. According to the conference organizers, some 2,000 participants were there, including representatives from 175 startups and 300 investors with a total of $30 billion under management.
The startup competition’s top two prizes went to Russian teams. Kuznech walked away with the Best Startup award and a €15,000 prize. This St. Petersburg startup – which already won several other recent contests – is developing a technology for indexing and comparing billions of images online, using a 150-parameter statistical algorithm. Kuznech can find similar images in seconds by comparing them to image signatures in its reference database.
The second prize was taken by Flocktory, a startup from Moscow, which received €10,000. Flocktory’s social marketing solution motivates online shoppers to recommend online retailers to their friends through social networks in exchange for discounts and bonuses from those retailers.
The €5,000 third prize went to Czech startup realPad, which developed an advanced mobile application for realtors and residential real estate developers.
The winners also received an opportunity to present their projects to such business accelerators as White Bear Yard (London), H-Farm (Italy), and Project A (Berlin).
The public’s choice award went to Human Reader. Developed by Alpha-Smart, a Russian startup with offices in Moscow, Kazan, and Paris, this technology has been designed to read the expression of a person through facial and eye movements. Presenting itself as “an automated, intelligent recognition system of human emotions, psychological types, and psycho-physical conditions,” it could be applied to a variety of fields, from HR management to psychological assessment of bank clients requesting a loan.
Next hype vs. long-term minded entrepreneurs
The event also offered a rich conference and discussion program. In her opening remarks, Victoriya Tigipko, the organizer of the event and the managing director of TA Venture, underlined Ukraine’s “most important asset: brains,” which she pointed out contributes to satisfying the huge demand for IT specialists at the global level. However, “it is vital to create final products,” she said, identifying investments and international experience as “the levers that will definitely give a push to Internet entrepreneurship in Ukraine.”
One of the discussion panels was dedicated to the future of e-commerce in Central and Eastern Europe. Leonid Boguslavsky, the founder of major Russian venture Ru-Net, expects moves toward consolidation on the Russian market, where even the largest players have tiny market shares. However, he believes, the specificities of each country can become a serious obstacle to the expansion, mergers or acquisitions of e-commerce players at the international level.
On the other hand, fellow panelist Oskar Hartmann, reminded the group that KupiVip had successfully applied Gilt.com’s flash sale model to Russia, even though at the beginning, “some had listed 100 good reasons why the concept couldn’t work in Russia.”
Asked whether KupiVip’s flash sale model could ultimately fail – as Groupon’s initial daily discount model is currently in crisis – Hartmann answered: “The business model that works is that of entrepreneurs who build their business for the next 20 years, and not jump on the next hype. It is strong entrepreneurs who carry business models, not business models that carry entrepreneurs.”
Adrian Burleton of Studio Moderna, Cristina Berta of the MIH-Allegro Group, Leonid Boguslavsky of Ru-Net, and KupiVip’s Oskar Hartmann shared their views of the future of e-commerce. The panel discussion was moderated by EWDN’s chief editor Adrien Henni.
In an exchange with East-West Digital News, angel investor Jose Marin, who invested in five Russian startups, shared his perception of the latest trends on the local investment scene. “There has been a dramatic change in Russia over the past 18 months. With more and more seed capital available at the seed stage, deal terms are less and less favorable to angel investors. Russian startups have lost part of their attractiveness at the seed stage for this reason; but we investors might switch to series A financing rounds, where capital is still scarce.”
In a press meeting on the last evening of the conference, held at the Leo Club, Runa Capital‘s Sergey Beloussov saw the next big things in smartphones, “which tomorrow will be more powerful than today’s computers,” and computer games, “which represent a market tens of times bigger than the movie market.” Investment prospects are great, too, in such government related functions as healthcare and education, “where so much remains to be automated.”
The next edition of IDCEE will take place in Kiev on October 10-11, 2013.