This is another piece in our quest to bring you the amazing story behind many successful establishments today. So, if you have been itching to know about that great venture fund, Almaz Capital, then this is the article to read.
Here, we have detailed all that you need to know about the establishment, including its funder Alexander Galitsky. Want to know how this guy translated from science to venture investments? Just keep reading. You will be amazed at the development that has happened within Almaz Capital Fund over the years.
Alexander Galitsky – From Science to Venture Investments
Almaz Capital is a large venture fund. It was founded in 2008 by IT entrepreneur Alexander Vladimirovich Galitsky. The company identifies and supports high-tech startups capable of rapid growth and brings them to the global level. The geographical focus today is mainly on Eastern European countries.
The History of the Formation of Almaz Capital
In 2004, Galitsky received an offer to organize and lead the European Tech Tour Forum, which was held in Russia for the first time and gathered strong foreign investors. The purpose of the event was to identify promising IT startups for venture investment in the post-Soviet space. Galitsky and his team studied more than a hundred companies, among which they identified the most attractive from the investors’ point of view.
This forum became the first step to the creation of Almaz Capital. At it, representatives of Cisco Systems offered Galitsky to form a venture fund with their direct participation in order to invest in Russian startups. The proposal was accepted but with a reservation.
The investment business should not be geographically confined within the borders of the Russian Federation or the CIS. Since its creation, the goal has been adopted – to reach the cross-border level and Silicon Valley.
Based on these agreements, a $72 million venture fund with its main office in the United States appeared in 2008. Alexander Galitsky became a managing partner at Almaz Capital.
And the head of the UFG management company, Charles Ryan, Pavel Bogdanov, a former partner of the Russian Technologies venture fund, and Peter Lukyanov, a businessman from the USA, are general partners. Further, the latter was replaced by Geoffrey Baehr, formerly the ex-general partner of U.S. Venture Partners.
The “anchor” was that same Cisco Systems, which invested $32 million in the 2008 project. It was joined by the EBRD (European Bank for Reconstruction and Development) UFG (United Financial Group), who contributed $20 million each. The fund’s partners Ryan and Galitsky also made investments as private investors. Almaz Capital focused on finding attractive projects in the CIS that can shoot at the global level.
Direction Shift
The formation of the second Almaz Capital (launched without Peter Lukyanov) with a volume of $174 million occurred in 2013. The International Finance Corporation (IFC), part of the World Bank, joined the fund. The geography has also expanded – to the East of Europe.
Since 2014, a new round of development of Almaz Capital has started. Due to the changed geopolitical situation, the fund stopped dealing with companies aimed at the Russian market.
LP European Investment Fund joined Almaz Capital III. In addition, there was a complete switch to the European and American markets. (Formed)The closure of the third fund was completed in 2021 with a volume of $ 191 million.
Key Projects
Over the years, Almaz Capital has invested in more than 50 companies for a total of $ 300 million. By May 2022, 18 equity withdraws had been made. The most famous and profitable of them are:
- Yandex (NASDAQ IPO) – search engine and ecosystem;
- QIK (sold to Skype) – video messaging service;
- Sensitivity Systems (sold to Verizon Communications) – a platform for managing the infrastructure of smart cities;
- Acumatica (sold by EQT) – cloud ERP systems for financial and customer database management;
- Xometry (NASDAQ IPO) is a marketplace designed to find performers for the production of custom industrial parts.
Today, the key companies in the fund’s portfolio are 3DLook, Acronis, GoodData, Grifgain, Hover, DMarket, Minute, Mobalytics, Neptune, Nomagic, OneSoil, Parallels, Referbed, Virtuozzo.
Alexander Galitsky – Biography and Facts
The high results of the fund are largely due to the contribution of its creator and permanent managing partner, Alexander Vladimirovich Galitsky – a talented man with an interesting destiny.
- He was born on February 9, 1955, in the village of Zarechany, Zhytomyr region.
- He graduated from school with a gold medal. He received his higher education at the Moscow Institute of Electronic Technology (MIET). While studying at the university, he became interested in theoretical physics and computer calculations.
- He started his career at the Research Institute of Micro-Devices. During the same period, he defended his dissertation in the specialty “Technical Cybernetics”.
- In 1987, he became the chief designer at ELAS Scientific Production Association, which was engaged in software for space satellites.
- Since 1990, he became the head of the ELVIS Company, where about 400 employees worked.
- In 1991, he visited Silicon Valley, from where he returned with a firm intention to promote domestic developments abroad.
- In order to circumvent bureaucratic obstacles in the USA, in the same year, he founded the ELVIS Plus Project.
- Galitsky is the author of 100 scientific papers and 30 patents for developments in the field of wireless networks and VPN technologies.
- He is an adviser to the B612 Foundation, an American non–profit organization for the protection of the Earth from meteorite collisions.
- In 2008, he created Almaz Capital, a total volume of 3 funds, which amounted to over $ 300 million.
- The story of Alexander Vladimirovich Galitsky formed the basis of the film “Startup,” released in 2014.
Galitsky’s Withdraw from the State Business of the Russian Federation
Now the investor is focused on his own business and does not hold any positions in Russian companies. Previously, he participated in a number of large-scale Russian projects, including those with state participation, but has already withdrawn from them.
This happened because the organizations were focused on the internal market, while Galitsky always worked with the external one. Thus, Galitsky resigned from the board of directors of Skolkovo and Skolkovo Venture Investments. Also, the businessman has recently left:
- Tips of the Venture market and RVC;
- Expert Council for the Development of the Information Technology industry under the Ministry of Finance;
- The Boards of Directors of Alfa-Bank, Megafon, and the Russian Quantum Center.
It is also worth pointing out Galitsky’s role in the MSU business incubator. The entrepreneur took part in only one meeting in 2013, after which the activity of the project gradually came to naught.
