Illustrating the internationalization of Russian venture activity, Target Global now operates from three offices located in Berlin, Moscow and Tel Aviv. Initially known as Target Ventures, the fund was launched in 2013 to invest in a variety of segments in the digital consumer space. It has got $300 million under management from its backers, who are undisclosed Russian individuals.
In a recent interview with Russian TV channel Mediametrics, Mikhail Lobanov, the fund’s Managing Partner, explained its international strategy and shared his plans to establish a presence in the US market. The excerpts below initially appeared in the Russian language in Firrma.ru
Is your company currently based in Berlin?
We have a big office with four employees in Berlin and I am constantly flying between Berlin and Moscow. We also have two employees in our Tel Aviv office.
Where is your company headquartered?
The company’s headquarters is located in Berlin, since we are closing more and more deals in Europe. Meanwhile, the Moscow office performs other types of tasks and is responsible for analytics. People are very good here [in Moscow]. Taking into account the current euro exchange rate, it’s much cheaper to hire them than before, so why not benefit from it.
Why Berlin?
We believe that Berlin is a new capital of the venture market. London is home to fintech projects, while Berlin is a good place for consumer Internet projects.
You have become much more active in 2015-2016, with 21 deals completed last year. What is the reason for that?
This is related to our international expansion. As of today, three out of five partners in the fund are foreigners and have nothing to do with Russia. They are integrated into the [international market], be it the ecosystem of Berlin or Tel Aviv. I believe we did the right thing by joining forces.
How did you manage to attract them?
Few European funds can invest from €5 to €30 million. Our ability to pay that much is a very big advantage. Currently, investors are inclined to participate in series B rounds, which are difficult to raise since there are just around 20 players on the market.
Why have you chosen Europe and not the USA? Why don’t you have a representative in the USA?
I have to admit that even with our $300 million under management we are still a small player for the US market. I believe, however, that we’ll start operating there [soon], but with a focus on a specific field, let’s say fintech. The US market is highly competitive, and we need to find the best niche for us to be as efficient and productive as possible there.
We consider establishing an office in New York rather than in California. This may be better since competition in New York is slightly less intense. When it comes to fintech projects, there are more such companies in New York, which is a financial center. And it’s in a more convenient time zone.
