Top 25 Hottest Russian Start-ups
To identify the most promising Russian Internet companies Informilo asked investors in Moscow, London, New York, Boston and Silicon Valley to nominate and vote on companies outside of their own portfolios. Many of the companies have moved their headquarters to the U.S. but all on the list have Russian roots. Some are well known, others are below the radar but unlikely to stay there for long. At least two are expected to go public soon, one will soon announce that it has raised a Serie A round and several could be seen roaming the halls at DLD Moscow May 27-May 29. Read on to see our picks for the top 25:
Most likely to exit soon
What it does: This virtualization company offers a way for users to run different operating systems on one computer. It's now moved into cloud and hosting provision, and to emerging platforms, such as the iPad.
Why it’s hot: Founded by Sergui Beloussov, one of Russia’s most successful serial entrepreneurs, the company now has revenues of over $100 million, is considered a global market leader, and is expected to go public soon.
What it does: disaster recovery and data protection software for physical, virtual and cloud environments.
Why it’s hot:
Another global company founded by Moscow-based Sergui Beloussov, a Russian serial entrepreneur-turned-venture capitalist, Acronis has revenues of over $100 million. Its software is sold in more than 90 countries and the company is expected to go public soon.
What it does: cloud-based enterprise resource planning and financial software.
Why it’s hot: The company has 150 customers and posted a 300% year-on-year growth in sales in Q1 of 2012. Keeping track of the financials is something every business needs to do and a canny provider of ways to do this is likely to remain hot, even in a chilly economic climate.
What it does:Develops and supports technical solutions for multiplayer browser games.
Why it’s hot: Its proprietary Flash-3D engine, GUI and high-performance server technology allow developers to create unique browser games and applications for social networks, two areas where smart money and developer attention are focused.
San Francisco, California
What it does: open source web server
Why it’s hot: This Russian company’s software powers some of the biggest companies on the web, including Facebook, Wordpress, Zappos, and Yandex.
Palo Alto, California
What it does: Another infrastructure company born in the east (the company says it’s American/Russian/Ukrainian) and headquartered in the west, this small platform-as-a-service offers developers of Java applications a hosted platform based around standard software stacks.
Why it’s hot: More than 15,000 developers use Jelastic and the company has partnerships with well-known hosting companies such as Servint, Host Europe and Dogado.
St. Petersburg, Russia
What it does: The first social educational network in Russia that aims to create a single platform for all participants (teachers, students and their parents) in the education process.
Why it’s hot: More than 80% of Russian schools using any IT system use Dnevnik’s platform..
What it does: LinguaLeo is the biggest interactive online language learning web service in the CIS.
Why it’s hot: More than one million users learn and practice their English on the site, which is only two years old and has no marketing budget.
What it does:Mobile and social gaming.
Why it’s hot: The company has developed 15 active social games, 6 iOS titles, 6 Android titles and a fast-growing gaming platform andis looking to reach annual revenues of $150 million this year.
What it does: mobile games
Why it’s hot: Zeptolab hit paydirt with its game Cut the Rope. According to the latest data from the Apple App Store, Cut The Rope was number five on its paid-for applications list for the iPhone. At the end of last year Zeptolab celebrated some 60 million downloads of the game and 1.6 million daily unique users.
Moscow and St Petersburg, Russia
What it does: Online travel agency serving Russian travelers.
Why it’s hot:.The founders of Oktogo.ruwere also the founding team members of Russia’s leading online property, Mail.ru. Angel investors and advisors to the company include Javier Perez-Tenessa (founder and CEO of Odigeo and eDreams), OLX founder Fabrice Grinda and Jose Marin (founder of IG Expansion)With that kind of clout, and $15 million in venture capital under its belt, Oktogo should do well in the online bookings arena, which is predicted to grow to $3 billion in Russia by 2015
What it does: Commercial open source shopping cart software.
Why it’s hot: Raising $1.5 million in funding from Runa Capital at the end of last year, Ecwid helps set up online stores on websites. The service is free for stores with fewer than 100 products; bigger online retail outlets pay via a monthly plan. Payments are handled by all the big providers including PayPal and Google Checkout. The aim is to be hassle-free: users can drop Ecwid’s widget on to a web page or a Facebook page. In May it announced that it was expanding its reseller program to include web hosting providers.
What it does: Simple integrated payment systems.
Why it’s hot: Not everyone who wants to pay online can, so Qiwi’s 120,000 payment kiosks are a very smart move, offering a way for services from banks and credit cards to insurers and social networks to collect money. The company also offers a Qiwi Wallet and virtual Visa cards.
What it does: Internet shop selling Russianlanguage goods – books, movies, music, and software.
Why it’s hot: The Amazon of Russia is Russia’s e-commerce leader, claiming 5.6 million registered users just over a year ago. Last year it raised $100 million in funding — one of the largest rounds ever raised by a Russian company. Given the headroom for growth in online shopping in Russia, this market leader should be able to build on its already strong position.
What it does: Russia's first online shopping club.
Why it’s hot: KupiVIP offers online designer brand sales with discounts of up to 70%. The company is projected to make revenues of $300 million this year. However, it’s also built a reliable logistics infrastructure and is looking to capitalize on the data it gathers from its 200,000 registered shoppers, making it a well-integrated company with services to capitalize on.
What it does: Daily deals website.
Why it’s hot: Despite general scepticism about the Groupon model, this Russian clone is nonetheless delivering the goods, with a reported $15 million in monthly revenues and an estimated investment of $25 million from Tiger Global Management.
What it does: Provides a marketplace plus logistics services including order fulfilment, accounting and legal support, as well as other e-commerce marketing tools.
Why it’s hot: Founded in 2008 by two Stanford students, Russia's "first online shopping mall" raised $30 million in March from Tiger Global and an unnamed financial investor in Russia.
What it does: Online classified site modelled on craigslist.
Why it’s hot:Avito offers ads in major Russian cities including Moscow, Saint Petersburg and as far east as Ekaterinburg in Siberia. Earlier this year it raised $75 million in funding from local private equity group Baring Vostok and global venture capitalists Accel Partners, adding to funds already contributed by Kinnevik and Northzone. Avito claims 40% of Russian web users visit the site at least once a month.
Saint Petersburg, Russia
What it does: Russia’s equivalent of Facebook.
Why it’s hot: Vk.com claims to have more than 110 million registered users, with 33 million logging on every day. Forbes reckoned its revenues to be $152 million at the end of last year, though it recently ran into trouble when a Russian court rules that its file-sharing service infringes copyright, which might curb its popularity.
What it does: Online travel service for Russian users.
Why it’s hot: Less than two years old, this Moscow-based company is reckoned to be one of Russia’s fastest-growing online booking services. With funding of $13.6 million and a staffing roster that includes people from big web beasts such as Yandex, booking.com and Google, among others, Ostrovok looks set to tap into what is considered to be a booming market in Russia.
Under the radar
What it does: AlterGeo, formerly known as Wi2Geo, is a leading social, local, mobile service in Russia and the CIS. As with FourSquare, AlterGeo allows users to "check in" to locations, see where their friends are, win points and receive discounts.
Why it’s hot:AlterGeo has partnered with thousands of restaurants, bars, cafés, shops, clubs, beauty salons, etc.; as of March 2012, it had more than 900,000 users, mostly in Russia and Ukraine.
Rock Flow Dynamics
What it does: High-performance modeling software to simulate complex physical and chemical processes taking place in underground reservoirs during the extraction of hydrocarbons. Why it's hot: RFD has a global client base in the petroleum industry, with more than 200 licenses sold worldwide. A $2 million investment from Intel Capital in 2010 is being used to open an office in Houston, Texas, and to expand international sales and marketing.
What it does: VitaPortal, a Fast Lane Ventures start-up, and one of Esther Dyson's top three recent investments, runs a website offering "comprehensive and reliable information on medicine and health."
Why it's hot: The company, which has raised more than $1 million in seed funding, is aiming to become the WebMD.comof Russia. It already has strategic relationships with the Ministry of Health and Social Development of the Russian Federation, major medical research centers and community organizations.
What it does: Siri-like virtual buddy for Android phones.
Why it’s hot:With its expertise in artificial intelligence and computational linguistics, and with plans to develop for other platforms including Windows Phone, this small start-up – which is about to raise venture funding from a well-known U.S. VC firm — already has an impressive reach.
What it does: a free platform that automates the process of creating browser-based applications for Russian-based Internet sites.
Why it’s hot:The company, headed by Michael Ushakov, a Yandex alumnus, is growing fast and is expected to soon branch out to other countries.