The Russian textbook publishing house Prosveshchenie (‘Enlightenment’ in English) has agreed with the Internet Initiatives Development Fund (IIDF, or FRII in Russian) to jointly launch an accelerator for edtech startups.
The publishing house — of which Russian billionnaire Arkady Rotenberg is chairman and a shareholder — intends to invest up to 3 billion rubles (approximately $48 million at the current exchange rate), as reported by the business daily Vedomosti last week.
On its side, FRII will select startups and contribute 500 million rubles (roughly $8 million at the current exchange rate) to the program, reported Vedomosti, referring to representatives of both organizations.
As specified by FRII representative Sergey Skripnikov, the initiative targets startups in the field of education technologies, including online courses as well as projects related to robotics, virtual reality and augmented reality applied to education.
According to FRII’s standard terms, each selected startup will receive 2.1 million rubles (roughly $33,000 at the current exchange rate) from FRII in exchange for a 7% equity stake in the company as part of the first stage of the program. FRII’s next-stage capital injection may amount 15 million rubles, almost $240,000, in exchange for a 10-15% equity stake.
Prosveshchenie will either contribute part of these amounts or provide additional funding. The publishing house is setting no limits to the amount spent on this program, Sergey Grigorenko of Prosveschenie said to Vedomosti.
From electrical power to textbooks
Arkady Rotenberg and his brother Boris are co-owners of the SGM (Stroygazmontazh) group, the largest construction company for electrical power supply lines and gas pipelines in Russia. Once judo sparring partners of Vladimir Putin, they are reported to have kept close ties with the Russian president.
Arkady became the chairman of Prosveshchenie in 2013. Following a reform of textbooks which turned out to be more favorable to this publishing house than to some of its competitors, Prosveshchenie consolidated its leadership on the textbook market, as reported by The New York Times.
Arkady’s current net worth is estimated by Forbes at $1.34 billion. His share in Prosveshchenie — whose profit margin exceeds 50% — is not disclosed, as noted by Vedomosti.
The Russian businessman is subject to personal sanctions by the US government related to his alleged role during the Ukrainian crisis.
Shrinking capital
FRII was created in 2013 following an initiative by Russian president Vladimir Putin to invest in online projects at the early stages. The fund’s capital, which came from undisclosed backers, amounts to 6 billion rubles, which equalled to some $200 million at the moment of launch, but to just $85 million today as a result of the ruble’s depreciation.
Each year the fund invests in 80 to 90 startups at the pre-seed stage in the framework of an acceleration program. At later stages, FRII may invest up to 324 million rubles ($5 million) in a single company, Dania Shumilkina, Head of Communication Projects, told East-West Digital News.
So far FRII has invested in more than 245 companies. One of its latest investments went to Metacommerce, a Moscow-based startup which has developed an e-commerce analytics platform.
