Digital Disrupt

History

2020

Artem Yermolaev and Andrey Belozerov told where invest money: from SpaceX to the platform for LGBT pairs

Founders venture Digital Disrupt clubs, the ex-head of IT department of Moscow Artem Yermolaev and his former deputy Andrey Belozerov in December, 2020 told TAdviser about cooperation with the international venture funds. Investors say that the venture portfolio with their participation contains tens of projects in Russia and also a set of foreign projects. Their main part is connected with digital technologies, but there are also projects in other spheres.

We understood long ago that "digit" is the most perspective market for the next decades, – Andrey Belozerov tells.

In this market Yermolaev and Belozerov trust in those segments which first of all are human capital investments. First, this online education – lifelong education (life-long education) – today one of the most fast-growing and perspective markets. Are in great demand also on-demand services which allow to save time for routine procedures and increase comfort of life of people.

In a top of popularity there is also a cybersport, investors claim. The age of cyberathletes increases every year, the audience of this market grows not linearly therefore despite a large number of players and a high threshold of an input on this market, investments in this direction give the effect. With respect thereto Yermolaev and Belozerov's venture portfolio includes the cybersports OverPro platform for holding matches and tournaments online. This project creates a cybersport ecosystem in which each player will be able to contact to managers and advertisers.

Among the Russian projects of investors also the platform of car-sharing on The Mashina subscription - the new service of cars on a subscription which appeared in Moscow. A lease term — 1 year, but perhaps early agreement cancelation with payment of a penalty fee. Cars new are also delivered directly from the producer, is told in the description of service. In a portfolio, for example, there is a platform for insurance of things according to the photo "Everything is all right".

Yermolaev and Belozerov tell that they work in partnership with the largest international investment funds among which there is Mindrock Capital (the USA, San Francisco) under control of Pavel Cherkashin created in 2018. Together with it investors invest in fast-growing projects. Also this fund allocates a small part of funds for investments at early stages and in the companies preceding the IPO.

Artem Yermolaev and Andrey Belozerov together with Mindrock Capital invested in such projects as SpaceX, Udemy, Momentus and others. In October of the 2020th Mindrock Capital increased a share in Elon Musk's SpaceX, having closed the transaction for $5 million.

Also the fund signed the agreement with Momentus of the Russian entrepreneur Mikhail Kokorich specializing in space logistics, having agreed to invest $ dollars 7 million and to receive shares of the company at the time of its exit to the IPO. Momentus is going to come to NASDAQ in 2021 at assessment in $1.2 billion. But in the market of the USA it was not without problems. In November of the 2020th of the statement of Stable Road Acquisition in the U.S. Securities and Exchange Commission it became known that Mikhail Kokorich has no access to Momentus Space technologies as he is not the American citizen. The company tried to get permission to Kokorich's admission to technologies since the beginning of 2018^[1].

Yermolaev and Belozerov note that, as well as "digit", the space market has the boundless potential of growth and is very perspective direction. With reference to experts they provide data according to which assessment of the industry can grow from $424 billion in 2019 to $1.4 trillion in 2030.

Also investors cooperate with the international funds Starta Ventures and 13 Ventures (the USA, New York) where Andrey Belozerov acts as an ambassador – are engaged in attraction of financial resources, examination and mentoring, and Artem Yermolaev – the partner (Limited partner). The last means that it is an external investor, his common responsibility is limited to the volume of the invested capital.

Among portfolio companies of investors – Pitch.Me (Great Britain) which is engaged in search of personnel for digital international leaders. In 2020 the company received the investments in the amount of $ dollars 1.2 million headed by Starta Ventures. One of remarkable functions of service – when forming a profile of the candidate it uses data of his digital trace, including, for example, data on how he plays computer games, in particular, of World of Tanks.

The project on digital education of children in Kenya of Fred the Hippo also prepares for an investment round. Also together with fund 13 Ventures Artem Yermolaev and Andrey Belozerov invested in such projects as BBy – the first-ever platform selling breast milk for LGBT pairs; Videray – manufacturing company of the portable x-ray scanners helping law enforcement agencies to fight crime.

Artem Yermolaev and Andrey Belozerov preferred not to open how many own means they invested during all the time. They specified that investment mechanisms at the same time different: both through funds, and through SPV (special purpose vehicle, the special legal entity). In 2020 Yermolaev and Belozerov created the closed private club of a venture capital Digital Disrupt. The mechanism of investment is an issue of structurization of specific transactions / formats which are under NDA (nondisclosure agreement), investors say.

Being engaged in new technologies, business models, trends, we see how they affect the stock market. For example, growth of capitalization of Tesla and start of the new plants by it lead to growth of the companies releasing electric batteries and accumulators. Trade wars of the USA and China start inflow of investments from the Chinese companies of the real digital sector in the company. The first signals of epidemic and a quarantine increase in an explosive way capitalization of digital giants and especially the companies ensuring remote work of employees. We perfectly catch all these trends and based on them we work at the stock market, – Artem Yermolaev explained TAdviser.

As for a pandemic, in particular, Yermolaev and Belozerov consider that it only accelerated transition of people to digit, and process began much earlier: when millenials who grew and matured during a smartphone and internet era began to reach an age of majority and to represent solvent demand for any digital products. The pandemic served as the catalyst of this process more likely, but hardly became it the reason.

30 million rubles of investments into service of storage of things "Kyyubi"

The Russian investors Artem Yermolaev and Andrey Belozerov during a November round of investments became new partners of a startup of "Kyyubi". The closed private club of a venture capital Digital Disrupt which founders they are invested 30 million rubles in the project. On December 10, 2020 reported about it to TAdviser in Digital Disrupt. Read more here.

Start of the closed private club of a venture capital Digital Disrupt

On December 3, 2020 the Digital Disrupt company announced TAdviser that the Russian investors Artem Yermolaev and Andrey Belozerov started the closed private club of a venture capital Digital Disrupt in 2020. For the beginning of December, 2020 the portfolio of club contains already more than ten startups.

The Russian investors founded private club of a venture capital for investments into online education, AI and cybersport. Photo source: kotlovkamedia.ru

Digital Disrupt invests as independently, and together with the partners working in the IT industry worldwide. Among them: international venture funds Mindrock Capital (USA, San Francisco), Starta Ventures, 13 Ventures (USA, New York) and others. Thanks to similar alliances the club provides to founders of startups access to financial resources and also to the best business practices and the help in development in international markets.

Among the priority directions of projects for investments of club – online education (training models in the changing world), on-demand services (the services of services saving time of people for regular routine procedures), micromobile projects (a kikshering, use of the car on a subscription), startups in the field of cybersport, applied artificial intelligence and science.

We consider digit the most perspective market for the next decade. We trust in the potential of startups of this direction. The people who grew up during a digital era recognize sign of success not "crimson jackets", and a good education therefore will invest in it even after the school and institute period. Lifelong education – one of the most fast-growing markets. The same can be told about on-demand services – digitization of routine procedures strongly increases comfort of life therefore also demand for such services will violently grow. In the world of cybersport we also observe interesting trends: the game industry actively gets into educational, advertizing and other segments of the digital market. For example, Facebook, Google, Revolut and other IT giant at workforce recruiting already use game mechanics.

Such startups as the Fred the Hippo application intended for electronic education of children in Kenya enter a portfolio of club; cybersports OverPro platform; the project on providing cars on The Mashina subscription; service of storage of prophetic on-demand "Kyyubi" and others.

Besides, the club together with partners invests in larger projects. For example, together with the New York fund Starta Ventures the club invested in the Great Britain recruiting PitchMe project analyzing digital traces of candidates and creating their objective profiles for potential employers. Together with the MindRock Capital fund located in San Francisco invested in Momentus company which invented the space tractor for an output of satellites to an orbit and in twenty years is going to extract minerals on other planets. And with fund 13 Ventures invested in the Videray company which developed the portable x-ray scanner.

In 2020 the club made the first "an investment exit" – the Tetrika project (the online platform for preparation for examination) was purchased by Mail.ru Group. It allowed to reinvest the capital thanks to which projects received resources and could show serious growth rates – some startups grew many times, for example, the children's educational Tilli platform for training of children for school increased by 25 times for 2020.

The Digital Disrupt club acts also as the mentor: provides legal advice bureaus and expert evaluation, helps to find an investment packet for implementation of a pilot project. The most perspective commands can participate in the meetings of club which are taking place in the closed circle of professional community.

Generally we invest in projects at early stages – when MVP (the version of a product, minimum useful to target users) is ready and the first sales began. We are necessary to such projects not just as financial investors, but also as carriers of smart money. Our digital competence and network of contacts allow projects to avoid errors at the beginning of a way, to quickly find partners, clients, investors on future rounds, explained the founder of Digital Disrupt club Andrey Belozerov.

Founders of club Artem Yermolaev and Andrey Belozerov consider that digital transformation changes lives of people to the best. Investors attract clubmen as ambassador of growth and help digital startups to develop that they, in turn, too entered the feasible contribution to these changes.

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