While many internationally-oriented Russian startups move to Silicon Valley, or to such European alternatives as Berlin, London or Riga, Branquad made a different choice. This Russian digital commerce startup recently landed in Lille, a large, tech-friendly city in the North of France.
Not only does its case provide yet another example of an International Russian startup success story, it also shows the benefits France now offers to foreign startups.
Brandquad’s story began in Moscow back in 2016. Philipp Denisov, who worked at that time in an international marketing agency, took his attention to a yet-to-be-solved problem in e-commerce: the lack of content in product cards.
A request from L’Oréal
“The more content was displayed, the more people tended to order, I noticed. Looking for a way to automate this, I looked at the product information management solutions that were available at that time,” recalled Denisov in an exchange with East-West Digital News.
A request came from L’Oreal. The French cosmetics giant had no fewer than 150 retailing partners in Russia – “each one with his own format of product cards, which required a huge amount of time to process,” says Denisov. On L’Oréal’s side, the information was scattered across various types of repositories from different departments, complicating things even more.
Teaming up with a co-founder, Konstantin Shushkin, Denisov created his startup, creating an MVP to serve L’Oréal as the first customer.
Like hundreds of Russian startups, Brandquad went through the IIDF (FRII) accelerator, receiving seed funding from them in late 2017. The next year, it was given a decisive boost from a Dubai retail acceleration program. “This forced us to ‘anglicise’ our company, and allowed us to close seven commercial deals,” Denisov says.
In 2019, the startup secured a €3.1 million Series A round from the IIDF and a Russian business angel. By that time, Brandquad’s client portfolio already included such giants as Bayer, Hasbro, Henkel, Unilever and many others.
It was Estée Lauder that drew Brandquad’s attention to the France opportunity: “They suggested we do there what we successfully did in Russia.” The suggestion looked all the more relevant with the better part of the startup’s client portfolio made of companies headquartered in France. Why not make France a launchpad to conquer the EU through these headquarters?
Taking a close look at the French market, Denisov noticed this country was home to a lot of retailers – not only French but also foreign ones. The young entrepreneur also felt that the French ecosystem was “more and more vibrant with strong state and corporate involvement.”
In Sept. 2019, Brandquad was one of the 17 startups selected – among thousands of applicants – to take part in the Paris-based Lafayette Plug & Play acceleration program. “We came out as the best startup of the batch, and secured access to a large pipe of clients,” Denisov recalls.
Startup relocation in times of pandemic
The pandemic did not stop Brandquad’s global expansion. In 2020, the company created a legal entity in France – it became the mother company, with subsidiaries in Russia and Dubai. Denisov himself moved to Lille. The fact he did not speak French did not prevent him from receiving the French Tech Visa, France’s generous visa program for startup entrepreneurs and their family.
Brandquad’s French success story continued in 2021. The startup opened an R&D unit in Lille – “there are half a dozen tech universities and a bunch of retailers there,” says Denisov, who has engaged in discussions with some of them.
In September, Brandquad secured €2.5 million in convertible or standard loans from Russia’s Skolkovo Ventures and France’s BPI. This state bank generously supports French startups, usually complementing equity rounds with free loans.
The startup now has a blended French-Russian team. This includes, on the French side, a CTO, an R&D project director and five engineers – including data science and big data specialists.
“At the beginning: I didn’t know about France’s advantages, its ecosystem – or I thought they were hard to grab. Obviously these opportunities are underestimated abroad,” says Denisov, who also considered Germany, Ireland and the Netherlands as alternative destinations.
“France appeared as the best choice, for our sector at least”, says the Russian entrepreneur.
More resources needed
However, the market is very competitive, with several French startups – including Akeneo, Alkemics, Data Impact and Quable – offering products with similarities.
To differentiate itself, Brandquad developed a digital shelf analytics module: “This gives us a competitive advantage as our clients benefit from a full-fledged product experience management platform,’
After its French softlanding, Brandquand wants to become a leader in its niche – “but we need more resources for that,” concedes Denisov.
Could Brandquand have led its international expansion so successfully, had it kept headquarters in Russia? “It is important to be physically and culturally aligned with our clients and prospects, and network locally.”
Success also requires a team with international business experience, diversity and speaking different languages,” adds the entrepreneur, who already has new target countries in mind.
