While asserting themselves as chief disruptors in the food delivery industry — fulfilling orders in 15 minutes in cities of Europe (e.g. Jiffy) and North America (e.g. Buyk) — Russian startup entrepreneurs are also penetrating neighboring segments. From urban delivery, to mobility, to local or international freight, some of them receive generous support from VCs, as illustrated by four recent deals.
Next-gen freight broker
Last month Fura, a Moscow-based startup offering high-tech services to truck drivers, attracted 600 million rubles (around $7.5 million) from a fund managed by Fort Ross Ventures. The deal came a bit more than one year after Fura’s previous round of funding — $2.1 million raised in November 2020 from an undisclosed Swiss fund.
Founded in 2017, Fura wants to disrupt the freight brokerage industry, which it describes as “highly manual and fragmented with negotiations-based pricing, repetitive phone calls, and no shipment visibility.” The Russian startup serves a variety of big and small clients in Russian-speaking countries as well as the USA.
Fura told Forbes Russia it completed more than 14,000 shipments in the USA last year, generating some $20 million in revenues.
Fura also displays an ambitious M&A strategy: “We acquire and grow freight brokerage companies by empowering them with our proprietary, revolutionary technology,” Fura says on its website.
The startup asserts that “businesses grow 2.2x year-over-year and profitability increases by 68%” after they adopt its platform.
“We have provided venture debt in addition to the VC funding,” said Alexander Konoplyasty, General Partner at Flashpoint VC (ex-Buran Ventures), in an exchange with East-West Digital News. “The company is led by strong founders who have been capable to expand from Eastern Europe to the US. There is also a robust tech product, which shows good market potential,” he added.
Delivery business in emerging countries
An international venture firm with connections across Eastern Europe, Flashpoint VC is also an investor in Borzo. Previously known as Dostavista, this delivery service made the news in late 2021 as it acquired Indian bike taxi startup Now.
A few months before, Borzo completed an impressive Series C round, raising $35 million from a bevy of major international investors.
Founded in 2012, Borzo is now among the global leaders in its field. It operates in 10 emerging countries — Brazil, India, Indonesia, Malaysia, Mexico, the Philippines, Russia, South Korea, Turkey and Vietnam.
Russian e-scooters from Portugal to Hungary
Still little known internationally, kicksharing service Whoosh is a market leader in Russia with a claimed 45% market share. Launched in April 2019, this company started with 20 scooters in Moscow, before expanding to St. Petersburg and Novosibirsk.
Whoosh told EWDN it currently operates in 24 Russian cities, using 45,000 Ninebot Max Pro scooters with custom, own-developed hardware and software. The company claims it was the first in Russia to offer a stationless electric bike rental service.
“We also have a secret sauce in terms of business model,” said Whoosh founder Sergey Lavrentiev.
In December 2021, Whoosh announced plans to enter the EU market — starting from Lisboa and Budapest in the first half of 2022.
Whoosh is backed by Ultimate Capital Fund, a Cyprus-based fund with Russian founders, and VTB Group, a Russian state-owned financial institution. They injected $25 million in total into the startup.
From Europe to Australia by “hyperplane” in two hours
Russian serial entrepreneur Mikhail Kokorich — whom his PR team describes as “Russia’s Elon Musk” in spite of his recent SPAC misfortune — claims his new invention will ship cargo between Europe and Australia in just a couple of hours.
His company Destinus is building a hydrogen-powered, zero-emissions, transcontinental cargo drone. With hypersonic Mach 15 cruise speeds, this “hyperplane” will “combine the technological advances of a spaceplane with the simple physics of a glider to create a vehicle that meets the demands of a hyper connected world.”
In a seed round that spanned from August 2021 to February 2022, Destinus raised as much as $29 million, according to CrunchBase data, to make this dream come true.
A generation of tech heroes
Russian-speaking founders have a number of competitive edges in the international markets for several reasons, believes Konoplyasty. “Usually, these founders have a very strong technical background and a good understanding of their products. What’s more, they have access to cheaper pools of talent, which everyone is after these days. This allows them to spend less capital and get further from a revenue perspective compared to their US or other peers.”
These founders might be less experienced in sales/marketing compared with founders from other geographies, concedes Eliseeva — “but this pushes them to iterate more and hire high-level people at an early development stage.”
“Overall, considering 300,000 graduates from tech universities every year — which is one of the largest number of graduates in Europe — we are going to see more and more of Russian-speaking founders assert themselves globally,” he concludes.
“Eastern Europe has generated a brilliant generation of tech entrepreneurs whose companies are now reaching maturity,” concurs EWDN chief editor Adrien Henni in his CrunchBase column.
Creating their companies in the West — or moving there at an early stage of development — these entrepreneurs tend to follow a specific development path, Henni notes, citing recent studies: “Many of them focus on digital technologies that do not require considerable capital injections; they tend to raise less, and later, than their Western peers.”
