by Contributing Author
Almaz Capital Founder Alexander Galitsky invests in IT companies. In 2021, he formed a third fund of $191 million. The total investments exceeded $ 300 million. Since Almaz Capital foundation in 2008, the organization has invested in startups aimed at entering the global market.
The investor explained the focus on projects created by teams, including those from Eastern Europe, to the situation in domestic markets. The position of venture investors also mattered. He noted that in the USA major players in 85% of cases absorb promising startups at the earliest stages of their development, but Europeans are often afraid to work with new projects. Especially when it comes to technology.
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Alexander Galitsky stated that he decided to create Almaz Capital after an offer from Cisco Systems. In the early 2000s, it was engaged in the globalization of activities, so it paid attention to the countries of the post-Soviet space and Eastern Europe.
John Chambers, who headed Cisco at that time, stated that the company should meet the demand for technology through venture investments and the development of innovative startups. Alexander Galitsky understood the potential of such projects and saw their prospects when entering the global market. The investor was interested in Cisco’s offer. As a result, he decided to create a transborder fund, which was initially Western market-oriented.
Having founded Almaz Capital in 2008, Alexander Galitsky enlisted the support of leading market players. The European Bank for Reconstruction and Development has become a partner of the fund. The largest investor was Cisco.
The founder of the fund noted that Almaz Capital immediately received large-scale support. Together with Alexander Galitsky, the partners were the head of Deutsche Bank in Russia Charles Ryan, ex-partner of the Alloy Ventures fund Peter Lukyanov and ex-partner of Russian Technologies Pavel Bogdanov. Later Geoffrey Baehr, who previously worked at a large venture fund U.S. Venture Partners, joined them. Alexander Galitsky and Charles Ryan also became private investors of the first fund.
The second fund was opened in 2013. Its volume amounted to $174 million, the International Finance Corporation was added to the number of investors. This helped to expand the geography of the foundation’s work, to cover even more regions of Eastern Europe. In addition to key investors, many business representatives also invested in it.
The third fund was created with the attraction of additional investments from new partners. Dozens of companies participated in various projects. Another partner was the European Investment Fund. The principle of development has not changed. In 2021, the fund was formed with an amount of $191 million.
In May 2022, 18 companies withdrew from the fund’s share capital. In total, Almaz Capital has invested over $300 million in more than 50 startups. Intel Capital, SoftBank, and other organizations have been co-investors at various times.
Among the successful projects of Almaz Capital, the following companies should be singled out:
· 3DLook is an innovative personalized shopping program based on unique data about the measurements and shapes of the buyer’s body.
l Acronis is a software developer whose products are in demand in more than 120 countries around the world;
l GoodData is an IT project headquartered in San Francisco, its products are used by over 30 thousand business customers;
l GridGain – developer of resident database management systems;
l Hover – works in the field of 3D modeling and produces software for assessing losses caused to buildings as a result of insurance events;
l DMarket – supports a platform for trading virtual items using blockchain and develops technologies for creating metaverses;
l Minute – creates solutions for smart home and security;
l Mobalytics – deals with analytics in the field of video games;
l Neptune — Metadata repository for research and production purposes;
l Nomagic — intelligent robotics services that help automate processes in the areas of e-commerce and retail;
l OneSoil – mobile and web applications that allow using satellite images for agricultural analytics;
l Parallels is a software developer headquartered in Seattle, creator of the Virtuozzo virtual machine;
l Refurbed – repairs mobile phones and sells refurbished gadgets;
The fund signed many deals during the pandemic, in particular with DMarket and Minut companies. This became possible due to the fact that representatives of Almaz Capital and startups have previously agreed on cooperation. As Alexander Galitsky noted, it is difficult to invest in projects without a personal meeting with managers, because the fund invests in the team and accompanies it for at least 5-10 years. Therefore, during the pandemic, many processes were distorted and agreements were concluded mainly with familiar startup managers.
Alexander Galitsky – biography and withdrawal from Russian projects
The investor was born in the Zhytomyr region of the Ukrainian SSR. Graduated from MIET, and worked at the Research Institute of Micro-Devices. He founded the company “Elvis +”, which was engaged in technological developments.
Alexander Galitsky took part in several Russian projects. However, he left them and focused on managing a venture fund.
What projects did the investor withdraw from:
1. Skolkovo. He was a member of the board of directors, but at the end of 2021, he asked to be excluded from the board because he could not remain effective due to the shift in the scientific center development vector.
2. Expert Council under the Ministry of Communications and Mass Communications of the Russian Federation. The investor left it because the work was no longer relevant and took too much time.
3. Russian Venture Company The entrepreneur left it because he decided to focus on working with cross-border companies.
4. Alfa Bank. The investor believed that working here would help him understand the banking system and investments in the fintech segment, however, the circumstances changed and Galitsky left the board of directors.
The entrepreneur also left his job at the Moscow State University business incubator. He noted that he participated in only one meeting, after which the project ceased to exist. In addition, the investor resigned from the board of directors of Megafon and a number of other companies. Now he does not participate in Russian projects and concentrates on the further development of the fund.
Galitsky Alexander Vladimirovich is an investor, businessman, and scientist. Wi-Fi and VPN technologies pioneer. Author of 100 scientific papers and owner of 30 patented inventions. Doctor of Science.