Kind venture. Part 2.News of the venture industry and the innovative companies, comments of experts in weekly transfer " the Kind venture ".
amp-hr.: good evening!
D. R: the Kind venture!
Amp-hr.: with you Dmitry Repin.
D. R: And Tchebotaryov`s Anna.
Amp-hr.: today we will talk about why the Russian venture investors have become interested in the Chinese market, what communication between a kayak and IPO and why among summer investors are put in " the Snow-storm ". We will begin with the first news. Venture fund AddVenture in partnership with logistical company STS Asia invested $5 million in online - a platform " Optor ". " Optor " represents to the Russian small and average business a full service on purchase and delivery of the goods from the Internet - shops of Asia, first of all, China.
D. R: It is necessary to notice that it not absolutely standard transaction for typical venture fund as, under our data, here children from AddVenture have thought up the project and have found the command that it has executed it. Give we will contact Sergey Karpovym who is operating partner AddVenture, and we will ask on details of this transaction.
Amp-hr.: at us on communication the operating partner of fund AddVenture Sergey Karpov. Sergey, tell, please, who posessed idea of creation of business " Optor "?
With. K: Initially the idea has been developed in fund AddVenture. We together with my partners: with Maxim Medvedev, Pashas Terentyev have noticed interesting enough tendency which occurs in China. Throughout business - models Alibaba which represents the catalogue the Chinese manufacturers, have appeared such projects, as DHGate, AliExpress, DealExtreme, LightInTheBox and so on which, as a matter of fact, are eskrou - agents and a market - plejsami for manufacturers and the wholesale companies. These companies get to lists of the most fast-growing technological companies in the world. That is, for example, DHGate grows rates on 500 % a year. There commodity turns are measured by billions dollars, and basically any melkooptovye the companies, that is it is retail, restaurants, small biznesy, prefer to buy on these platforms the goods for resale or for own use. Because there is an essential price economy, and they cut off price arbitration which is wound by wholesalers and distributors, bringing the goods from China. Thus the technological toolkit allows more favourably and it is convenient to get the goods directly directly at the manufacturer.
Amp-hr.: Serezha, a leah correctly I understand that you have invited the team which will operate the project " Optor "? On what conditions?
With. K: We initially have gone by the way of search among current projects because there is a number of the small companies which already trade in the goods from China. But for various reasons we have not decided to invest in one of these companies. Also have begun search, as a matter of fact, management. And to us has carried that, as a matter of fact, just Igor Karpatchev who was CEO Allegro Mail. ru Group, during this moment of time was on certain crossroads, and we managed to invite it in the project.
certainly, here management repayment terms aggressive enough, but they go to a counterbalance aggressive KPI which we have exposed. That is we expect from the command to receive 300 orders in day till the end of this year, and by results of 2013 to make a commodity turn $100 million As a result of it the command actually on 2013 can become very much the principal shareholder. I am not ready to open percent, because there there is a scale depending on result. I can tell that it is one of the most aggressive schemes of about what I know in the market. I at all do not know more aggressive.
Amp-hr.: thanks big. We on communication had an operating partner of fund AddVenture Sergey Karpov.
D. R: it is necessary to note one more detail of the given transaction: carrying out of settlement operations of service " Optor " will provide QIWI - bank. And QIWI is one of fund AddVenture partner. But it not a unique counter of service " Optor " which will allow the Russian business to buy directly the goods from the Asian sellers, avoiding intermediaries and incurring all problems with delivery and a customs clearance. This uneasy problem should be embodied to Igor Karpatchev, the general director of the company " Optor " With which we now will try to communicate and learn, how it will do it actually.
Amp-hr.: at us on communication Igor Karpatchev, the general director of the company " Optor ". Igor, I understand that specificity of the Asian market of electronic commerce does wholesale purchases in Asia by business difficult and risky for the Russian business. But time you have decided to get into this history, I understand, what you are able to communicate with customs, and a leah you know the Chinese language?
And. K: I do not own personally Chinese language, but in staff of our partner - companies STS Asia which works in territory of Asia already more than 10 years, there are the employees knowing the Chinese language, English and Russian. Therefore jazykovyj the barrier at us is completely overcome.
Amp-hr.: and who your final clients in Russia?
And. K: We divide our client base, potential clients, into three basic groups. They are large wholesale buyers: Shops and services which buy the goods on a warehouse for sale in the retail points or in the Internet - projects. It melkooptovye buyers, that is small tents, booths, the shops, buying small parties also for use in business or for resale. And the retail buyer. With platforms of type Wikimart and " the Hammer " we co-operate in a direction of the retail buyer. And with the two first groups which I have mentioned, we work directly, individually with the companies.
Amp-hr.: and last question. Present that in a year of business at you go very well. We will assume, at you in staff of 100 persons. How much from these people will be in China, and how much in Russia?
And. K: I will assume that, probably, in Moscow the marketing command and working out will be concentrated basically. And in China - quality check, warehouse service, work with suppliers. I think that, navskidku, breakdown will be 50 / 50, maybe, 60 / 40. Approximately under such scheme.
Amp-hr.: Igor, thanks big. We on communication had a general director of the company " Optor " Igor Karpatchev.
D. R: we Hope that the future successes of the company " Optor " will give us occasions in our program yet time to return to this subject. And now we will interrupt on a small pause after which we learn about where Yury Milnera`s former partners will invest.
Amp-hr.: Michael Vinchel became the partner of venture fund Buran Venture Capital. Michael Vinchel - the founder of the investment company " the Prospectus " the Internet - holding Mail. ru Group.
Buran Venture Capital - the Russian venture fund. It is based in 2010 by Michael Solontai and Alexander Konopljastym. The fund plans to invest $50 million in the company from Russia, the CIS and Israel during following four - five years. Buran online - media, the mobile Internet and SaaS is focused on electronic commerce. In one company invests from $300 thousand to $3 million
D. R: Really both Alexander Konopljastyj and Michael Solontai - they invest - bankers. And, probably, experience of the person which was Yury Milnera`s partner, which else since 2005 together with Yury Milnerom did Fund of ten, will be very useful for Buran Venture Capital. We know that now at Buran where - that $10 million under management. They are going to involve still money. I think that it is possible to try to contact someone from operating partners and to learn details.
Amp-hr.: I suggest to call Alexander Konopljastomu - to fund Buran Venture Capital partner. At us on communication Alexander Konopljastyj. Tell, please, why Michael Vinchel became orchestra Buran Venture Capital.
And. K: Michael Vinchel is interesting to us as the partner of our fund for some reasons. In - the first, it is the person who has started to be engaged in enterprise activity in the end of 1980 has constructed at first the investment company " OLMA " then the investment company " the Prospectus ". At various times it was the councillor of directors, for example, such companies, as " Sibneft " " Aeroflot " that is, it has enough wide experience in the field of business in Russia as a whole, very big communications, the person who knows many, and understands how correctly to do business in Russia in any absolutely sectors. On the other hand, it is the person who was one of company Mail founders. ru which directly is engaged the Internet - in business, and accordingly understands, how the Internet - business develops, what the problems at them is, what strategy can be for development. Therefore for us to have such person as the partner really it is very useful.
amp-hr.: now under control of Buran an order of 10 million?
And. K: Yes.
Amp-hr.: look, I will risk to assume that to collect a serious portfolio from venture stories of 10 million obviously will not suffice. A leah you are going to involve still money?
And. K: We dance, first of all, we build the strategy of development of fund, being focused on a number of directions investment. We have five basic sectors at which we look. Electronic commerce in the field of services, online - media, it accordingly everything that is connected with the mobile Internet, mobile offers. Everything that everything is connected with entertainments and social mass-media, and also that is connected with software as a service. Now we see, enough considerable quantity of possibilities, therefore as we invest the fund and we see that it is required to invest in any new projects, we will consider, probably, possibilities of additional attraction of financing. It basically enters into our strategy of development.
Amp-hr.: and what you will do, if will not collect, say, these 50 million?
And. K: In any fund the most important thing are good transactions which really show result and from the point of view of growth and attraction of any additional money. Therefore we consider that here should for us tell our transactions and our results, therefore, when these results will be, I think that we will think further of own development. When time will come to think of any development, expansion, we will think of it. Now at us a little bit other priorities connected with investment activity and search of correct projects which we could invest in the available capital.
Amp-hr.: just about correct projects last question. In fund Buran Venture Capital plans to invest it is more in clones or in any super original projects? And why?
And. K: We invest not in clones and not in projects successful and original. We invest in businessmen who have experience, have desire, have the good command behind shoulders, have energy, put up own money. And these businessmen should be engaged in projects in enough large markets. These projects should be scaled and fall under that investment strategy which at us is, in those sectors which we look. We have unique enough, developed by us skoringovaja a system through which we banish projects, therefore we basically is focused enough we look. At us basically the filter on clones, not clones - such bias at us, say, is not present.
Amp-hr.: thanks you big. We on communication had an operating partner of fund Buran Venture Capital Alexander Konopljastyj.
D. R: I already, probably, communicate more year with Alexander and with Michael. And one of them portfelnyh the companies " SravniKupi. ru " probably, has partially induced them on calling people with such examination subject. Here actually so it has turned out that children remained with the company and have been urged to be engaged in management and business construction completely. Though can be, they initially and did not want it. Here, probably, it is necessary to notice still one good trend that examination Mail. ru Group, and also money which, probably, many investors and not only have received during IPO, come back in venture business. Here besides just mentioned Michael Vinchelja it is possible to remember and Dmitry Grishin who has created fund Grishin Robotics whom we discussed in one of last programs, the sum of 25 million dollars.
Amp-hr.: obviously the summer comes to an end, and investors prepare for a new season, displaying the money on key funds.
D. R: Today in our program news from the Russian venture market sound practically only. However we cannot avoid and the big stories of a world scale. In particular IPO companies Kayak about which we will talk in the following part of the program.
Amp-hr.: tourist online - service Kayak left on IPO and has involved $91 million company Capitalization is estimated more than in $1 billion It is interesting that after the first day of the auctions, unlike company Facebook, in NASDAQ shares of company Kayak continued to grow.
D. R: These are very good news. However, considering that Kayak gathered on IPO in November, 2010, but for various reasons, including from - for market statuses, and then from - for volatilnoj stories with Facebook postponed, but, nevertheless, it has occurred. The estimation, by the way, even is more - where - that than $1,2 mlrd company capitalisation at the moment.
Kayak - the international company which in 2004 was created by founders of services Expedia, Travelocity and Orbitz. Kayak represents a search engine and comparisons of offers in the field of air tickets, cruises, hotels and a car lease. In 2007 the company has involved $196 million from a number of venture funds. Before within the limits of three rounds of financing Kayak has received about $27 million
D. R: However, except fact IPO, probably, it is necessary to notice and that the company is going to use the involved money, including on expansion on the Russian market. And this history has even mysterious colouring as about purpose by the general director of company Kayak in Russia Andrey Verbitsky people have learnt not from official a press - release, and from status change on LinkedIn.
amp-hr.: and just in connection with exit Kayak on the Russian market on site VentureBeat one interesting letter from Max Krajnova, CEO companies Aviasales has come. ru which is one of leaders on sale of tickets in online, and, actually, working on the same business - models, as well as Kayak. com. In the letter Maxim has shared several insajdami, connected with exit Kayak on the Russian market. It became known that Kayak has come on the Russian market in February - March, 2012 and tried to find the project which it could absorb or enter partnership but so it and has not found. I suggest not to deform another`s words and to call the author of the letter - to Maxim Krajnovu.
D. R: CEO companies Aviasales. ru Maxim Krajnov. Maxim, we have read your letter on site VentureBeat. Such question: a leah the money involved during IPO will help, to service Kayak. com it is successful to develop in Russia?
M. K: If they spend this money for Russia, without having understanding of the market and without having good presence in this market, it seems to me, is a little illogical. That is they put Cart without a horse. In an ideal the model of an exit which really for them would work is or model of slow growth throughout a year - ones and a half, or purchase of the player or at least joint venture. Money does not solve a problem of absence of knowledge.
D. R: What basic problems or calls for exit Kayak to Russia, in your opinion, will be? It will be technologies or it will be marketing and attraction of users is simple?
M. K: Things - that interconnected, actually. Because, if the product not full enough meets the requirements of the market any marketing initiative even if you the leader of any other market, and Kayak, undoubtedly, is the leader and the American market and it is known in Europe, will not help. Absence of contacts to the Russian agents, absence of the Russian-speaking interface, absence of possibility of the user to see all information in Russian and to have possibility to communicate with Russian-speaking support, - things which can be made enough - taki quickly. Even it is possible to train the personnel or someone to buy up. But it is work, and it is required, it seems to me, very competent leader who could make it. Thus the problem with the leader dares. Simply at first it is necessary to solve a problem with the leader, and then already to be engaged in marketing products. But not to the contrary.
D. R: as a whole, telling about the market online - reservations, at us it is a lot of the companies actively working in this market. How you think, it remains enough fragmentirovannym, or someone from the big players, maybe, Google which does the service in area metasearch, will grasp any big share of the market?
M. K: Oh, now I will tell fortune Taro. Actually, here there are some trends. On the one hand, consolidation necessarily will occur. On the other hand, I always give an example cows on a lawn: when the lawn big and green, it a little grows, it be no point to cows to become omnivorous and with knifes to climb against each other - the grass will suffice all. Therefore, I think that in the near future we, most likely, will see more than innovative travel agencies which it is valid in a status to offer the market any new services.
during any moment when the market will be narrowed and as it seems to me, it will occur during the nearest two - three years after that we will observe very interesting transformations. Naturally, in any large market usually remains three - five large players. That is small or die, either them throw, or they close shop and go on other markets, or is simple where - that perefokusirujutsja, we will look. My forecast such that in the nearest two - three years hardly we will observe consolidation.
Amp-hr.: thanks big, Maxim. We on communication had Maxim Krajnov, the general director of company Aviasales. ru. Electronic commerce for today - one of the most perspective directions of business in Russia, and online - tourism becomes simple a pot of gold. However I do not know, a leah to wish good luck of company Kayak on an exit on the Russian market because Russians like to travel, but the Russian market one of the few where tourism home market is much more more developed, than external. Russians abroad goes only 5 %.
D. R: Probably, any big actions, for example, the Olympic Games in Sochi will bring any changes in the Russian market of tourism, and, at least, will increase quantity of the foreign tourists coming to us. But " command; the Kind venture " Too will join number of those who uses online - booking, and will go to holiday the next three weeks.
Amp-hr.: with you there was Dmitry Repin.
D. R: And Tchebotaryov`s Anna.