Fastlane secures $13 million from Kazakhstani investor; celebrates first exits while conceding failures
Fastlane Ventures, one of the most active investors on the Russian Internet scene, has secured $13 million from Kenges Rakishev, a prominent businessman from Kazakhstan. Rakishev will be joining Fastlane Ventures’ board of directors, along with existing strategic investors VTB Capital, Direct Group, and e.ventures.
Rakishev already serves as chairman of the boards of directors of several large companies including SAT & Company, a diversified industrial holding. He is also involved in a number of international technology startups, including Mobli, a real-time media visual platform, TriPlay, a cloud service company, and NetElement, a technology driven group in mobile commerce and payment processing.
Fastlane did not disclose the terms of its agreement with Rakishev, but Corporate Communications Director Marina Glushkova shared some of the company’s results. Within two and a half years of operations, Fastlane Ventures has raised around $100 million from strategic and portfolio company investors, she told us. One of these rounds took place in April of this year, when Fastlane secured $18 million from VTB Capital.
“We have launched around 20 online companies within two and a half years of operations,” Glushkova said, while several of Fastlane’s startups moved on to successfully raise financing from third party investors.
Glushkova did not mention the exact proportion of these startups, but she cited the examples of VitaPortal, which recently secured $2 million from the Russian investment fund Prostor-Capital and US business angel Esther Dyson, and Lokata, in which e.ventures and Bonial invested an undislosed amount this past September.
Two exits and some failures
With two companies sold, Fastlane’s exit record seems more than honorable, especially taking into account the overall lack of maturity of the Russian startup market. In January of this year, Sapato.ru, an online shoe retailer which Fastlane had launched just 18 months before, was acquired by Ozon.ru, one of Russia’s top e-commerce companies, in what became the first major exit in Russia’s online retail market.
A few months later, Fastlane sold its stake in the TV and online teleshopping company Shopping Live to Germany’s Home Shopping Europe.
Glushkova also conceded there have been some failures. “We had several models that clearly didn’t deliver satisfactory returns within the required time frame and [in line with our] investments. For example, it may take much longer than expected to educate the market about new services or products, which can result in reviewing the business model or winding-down the business,” she explained.
“This is natural for a venture business and the Internet industry in general. We are proving all our business models in practice in a kind of live market test,” she concluded.
Among these failures is Upladder.ru, Rusbase.com reported earlier this month. Launched in July of last year, this site positioned itself as a premium job search portal, focusing on professionals with a monthly salary of more than 100,000 rubles, or $3,500. But Upladder’s business model was not commercially viable, and the site failed to show any operational profits, according to Rusbase.com.
Mixing seed funding, incubation, and operational involvement, Fastlane was established in June 2010 by Western businessmen Pascal Clément, the CEO of Direct Group, and Oskar Hartmann, who founded KupiVip.ru, Russia’s leading flash-sales site. Most of its projects are based on the idea of adapting relevant foreign models to Russian market conditions.
This article was updated on Dec. 17. 2012.