Boguslavsky Leonid Borisovich

Aktivs

As of March 2016, among the assets of Leonid Boguslavsky:

• share in Indian Snapdeal
• share in Ozon (sold in 2019)
• 2GIS
• about 20 projects in the RTP Ventures fund (USA)

• share in the Indian AppsDaily, which has built an offline distribution network for mobile applications in regional cities: most local smartphone buyers have never had computers before, they need to explain the entire concept of the application and teach how to use it.

• a share in the Indian project Faasos closes the niche between cheap street food and expensive restaurants: the city is divided into sectors, a small kitchen is opened in each, and the nearest free courier delivers food to customers. "It's basically an Uber model in different walks of life. They use technology to create infrastructure around a local point, "says Boguslavsky.

• 8.2% at Datadog (as of October 2019)

Biography

The son of the writer Zoe Boguslavskaya, wife of the poet Andrei Voznesensky. In 1973 he graduated from the Moscow Institute of Railway Engineers (MIIT) with a degree in applied mathematics. He worked at the Institute of Management Problems of the USSR Academy of Sciences and the University of Toronto until the early 90s, doing scientific research. Doctor of Technical Sciences.

In 1989-1992 he was deputy general director in one of the joint ventures.

1997: LVS System Integrator Sale

In 1997, Leonid Boguslavsky sold Pricewaterhouse the LVS system integrator, created after Boris Berezovsky left LogoVAZ. As a result, Boguslavsky became one of the first Russian venture capital investors. After becoming PwC's senior partner after the deal, he closely monitored the development of dot-com and Russia's emerging Internet business.

2000: Establishment of ru-Net Holdings Fund

In 2000, Boguslavsky with a pool of investors, which included the funds Baring Vostok, UFG and Rex Capital, created ru-Net Holdings and invested in Yandex, a startup of Arkady Volozh and Ilya Segalovich.

"For Yandex at that time, many foreign funds were not ready to give a dollar," recalls Boguslavsky.

A few months later, after leaving PwC, he invested in an online store Ozon.ru.

• April 2001 - December 2005: Vice President of Ru-Net Rashen Internet Investment Holdings Limited

In 2006, all assets of the ru-Net Holdings fund, except for a stake in Yandex, were transferred directly to ru-Net Holdings investors.

• 2001 - April 2007: Member of the Supervisory Board of Ozon Holdings Limited

• 2001 - April 2007: Supervisory Director of the Supervisory Board of Yandex Technologies Limited

• 2001 - Member of the Board of Directors of Internet Search Investments Limited (formerly Ru-Net Holdings Limited, renamed May 14, 2008)

• Founder of the investment fund. ru-Net

2007: Getting 20% in Systematics

Boguslavsky received his stake (20%) in the Systematica group of companies in 2007 as a result of its merger with the TopS BI group, of which he was a shareholder.

In 2007, Boguslavsky participated in the creation of the ru-Net II fund, an investor in MobileDirect (mobile advertising), iConText (contextual advertising), Aimobilko (Imobilco.ru, sale of digital content), Digital Access (streaming video Ivi.ru).

April 2007 - September 2008: Supervisory Director of Yandex Supervisory Board. N.V.

12.01.2008 - Chairman of the Board of Directors of OJSC Systematics Group

At this time, Boguslavsky is also a shareholder of the coupon service Biglion and owns a small share. Mail.ru Group

2011

Sale of part of the package during Yandex IPO for $67.7 million

In May 2011 IPO , during Leonid Boguslavsky sold shares in "" Yandex for $67.7 million. After the deal, Boguslavsky had 6% of the company's voting shares through Roth Advisors offshore.

RTP Ventures US fund launch

In August 2011, Leonid Boguslavsky launched a new venture capital fund in the United States called RTP Ventures, whose capital amounted to $100 million.

In parallel, he began investing in Europe through ru-Net, becoming, for example, one of the first investors in the German company DeliveryHero, whose valuation during the last round in 2015 was $3.1 billion.

Sale of 20% in "Systematics"

On November 30, 2011, it became known that the investment fund Ru-Net Holdings managed by Leonid Boguslavsky sold his stake in the group of companies. "Systematics" This was told by CNews the representative of the businessman^[1] also said that Boguslavsky will retain his place as chairman of the board of directors of Systematics.

When asked about the buyer of the share and the volume of the transaction, the representative of Boguslavsky refused to answer. According to market participants, about 20% of the group's shares were bought from the fund by other co-owners of Systematics.

In 2008, the controlling shareholder of Systematics Holding NCC sold about 20% of its shares to an investment company A1 owned by "." Alfa Group Experts estimated the amount of that transaction at $60-80 million. Subsequently, the A1 increased its share to 25.4%. The A1 told CNews that they did not buy shares from Ru-Net Holdings. The NCC declined to comment.

The funds raised for the shares sold will be directed to Russian projects owned by Ru-Net Holdings - both existing and newly created, a source close to Boguslavsky said.

At that time, Leonid Boguslavsky's funds include a number of Internet companies: the Aimobilko digital content store (Imobilco.ru), the Digital Access online video service (Ivi.ru), the Biglion discount service and the MobileDirect and iConText advertising networks. In addition, the Boguslavsky Fund is a large shareholder of Yandex and owns a small number of shares Mail.ru.

2012

Start of investment in India. Failures

Boguslavsky understood that his competitive advantage over large Western funds was his experience in Russia, which could be applied to other emerging markets.

The most obvious candidate is China. But there, as Boguslavsky explains, much more money was needed for investment than the fund could afford. "China very quickly became a fashion theme. Any local entrepreneurs who did something immediately aroused the interest of the press in the United States, they had status. India also has billion-dollar companies, but few can name them all. China as a whole gives a handicap of interest, "he says. Because of this, more funds work in China, you can enter the project only at a later stage with higher estimates.

The foundation began to look at Southeast Asia, Turkey, Brazil and India. The potential of India, where Boguslavsky once traveled in jeeps, in his opinion, is no less than China.

'That was my political decision. They didn't even discuss it, "said^[2].

It seemed to him that it was possible to work in India in the same way as in Russia. This turned out to be only 50% true, the billionaire admitted later in early 2016.

Venture investors from Russia in the Indian market unit. Gleb Davidyuk, managing partner of the iTech Capital fund, which recently invests a lot outside Russia, says that in terms of macroeconomic indicators, India is an ideal place for investors of all stages. Why doesn't he invest there himself?

"Like

any emerging market, it requires localisation, so being on it is physically just necessary. For us, India is still an incomprehensible market, albeit growing, "explains Davidyuk

.

"Boguslavsky is almost the only one who at the time of our arrival in India invested in local venture capital and did it successfully," says Andrei Terebenin, head of the recently created Sistema Asia Fund, the Indian venture capital fund AFK Sistema (the corporation itself invested in local telecom back in 2008).

Boguslavsky's first two investments in India were not very successful. He understood that one could not do without a local partner. Intermediaries immediately began to offer their services. But, as the investor recalls, one conversation with them was enough not to meet again.

Finally, at the Intel conference, he met Smile Group founder Harish Ball, and they liked each other.

In mid-2012, ru-Net invested two Smile Group projects - online trading platforms Freecultr (clothing) and BeStylish (shoes). The fund had experience in nurturing business, Boguslavsky's people flew to India every two weeks, trying to deal with companies and the market. But startups never took off.

The main reason, according to Boguslavsky, is that Ball worked as a business incubator: he only generated ideas, and hired the CEO from the outside to implement them.

"We learned our lessons. The company must have a founder ready to dig the land to succeed his brainchild, "says Boguslavsky, who no longer invests in companies whose founders are not at the helm.

The fund invested about $17 million in two startups.

One company managed to sell, although cheaper than investments, and the second is still in its portfolio, but its value does not grow as quickly as other investments. But Boguslavsky does not regret mistakes:

"

It's like billiards. If you want to learn to play well, play for money with strong players. And you have to lose some amount of money to learn. "

In addition, we managed to get to know the Indian market better and get to know the local managers of global funds. Before that, the ru-Net fund was a dark horse for the local market, no one had heard of its success in Russia.

Since then, he has made it a rule to enter a startup only on condition that a fund that can be trusted and has an Indian office came there before him or with him.

"We must do everything ourselves, our team. But since we are not there, we need people who are not your employees, but themselves are market players. Less conflict of interest if they invest themselves, "he explains.

Ru-Net's third investment in India was just according to this scenario: the Indian division of the Sequoia fund became a partner.

Boguslavsky had connections at his head office: Kirill Sheinkman, managing partner of his American RTP fund, came from Sequoia. But the Indian representative offices of American funds, as it turned out, live separately and make decisions on their own.

"The investment business is

all about human relationships. A particular person determines whether or not to give the opportunity to co-invest. Our knowledge of business in Russia seemed valuable: we have already done some things that India should have encountered only tomorrow, "explains Boguslavsky

.

Trusting relations with top managers of the local Sequoia developed after the conference in Singapore, where Boguslavsky's team went. They found common topics quickly - the fund was also an investor in the startup Freecultr.

"They showed us absolutely all their investment in India, all that remained was to remove the cherries from the cake," says Boguslavsky.

He notes openness as one of the features of the venture capital market in India. Both startups and funds understand that this is the only way to raise big rounds from a large number of international investors.

"In Russia, you must first send or receive a promising proposal and only then meetings are scheduled. In India, potential partners can meet just for an exchange of views, "says Ramnik Kohli, head of the Russian representative office of the Indian smartphone manufacturer Micromax, about the specifics of the market.

Investment in Indian Snapdeal

Deals in India close quickly. The conditions are agreed two to four weeks after the first meeting, another one and a half to two months is spent on due diligence, preparation of documents and closing the deal. In recent years, India has seen a capital boom: promising local startups are looking for the largest American funds, a lot of money comes from Asia. According to Ramnik Kohli, even government agencies are working in India to attract funds from foreign investors to the IT industry.

"Capital is swelling a lot, there are more and more new entrances, and there is a problem with exits. In terms of liquidity, this market's history is not very good, an understanding of local realities is required, "warns Andrei Terebenin.

At the same time, Indians are rather soft negotiators, the founders do not fight for every item in the shareholder agreement, like Russian or European entrepreneurs. Why are deals easy? If everything is bad, then carefully prescribed conditions will not save anyone, and if the business shoots, there will be new rounds on new conditions. "Everyone will be given to earn money," Boguslavsky says confidently.

Snapdeal founder Kunal Bal and major global fund Bessemer agreed on a deal at the very first meeting - its terms were written with a marker on the board in the negotiating room. Boguslavsky did not have time to participate in that round, he only came to India. In Snapdeal ru-Net invested in 2012.

Kunal Bal, the founder of the startup Snapdeal, was surprised to listen to an investor who flew in from Russia. He did not ask questions about revenue and other financial indicators at all. Leonid Boguslavsky asked about the nuances, indicating along the way the risks faced by projects with a similar business model from his portfolio in Russia, the USA and Vietnam.

"At that meeting, I" clever "to the fullest," Boguslavsky admits in an interview with Forbes. "They were interested in more eminent funds, it was necessary to show that they would receive smart money from me."

The calculation was justified. Boguslavsky, according to him, invested in Snapdeal in 2012 at an estimate of about $170 million, and at the beginning of 2016 the company is estimated at $6.5 billion.

Boguslavsky met around the world with coupon model companies like Groupon. In the United States, he spoke with LivingSocial, in Russia - invested in Biglion. In India, this model was promoted by Snapdeal at that time. And he liked the founder. Ball received an engineering degree from the University of Pennsylvania, a business degree from Wharton, worked at Microsoft. But the software giant reduced it, the authorities refused to extend the American visa, and had to return to their homeland. Together with a friend, he launched a coupon service, on the basis of which Snapdeal was created in 2010.

Then the company abandoned the coupon model, becoming an online trading platform that unites sellers of a variety of goods from sari to gadgets. By that time, India already had a large online store Flipkart, among the investors of which there are many funds "with deep pockets," including Tiger Global and DSTU Milner (at one time it was Boguslavsky who introduced him to Alisher Usmanov). Amazon also had a local representative office in India .

But Snapdeal had chances of success. Flipkart operates according to the traditional model of an online store with large warehouses, a significant staff, warehouse balances. At Snapdeal, by contrast, only a fifth of the goods went through its own distribution centers, the rest went directly to the buyer from the sellers' warehouses.

The strategy of the two stores differed in geography, with Flipkart targeting large cities and Snapdeal targeting medium-sized ones. "We felt like Snapdeal's approach was more scalable," says Boguslavsky, who met the startup's entire team and visited its warehouse. When it invested in Snapdeal, its sales volumes were half that of Flipkart. At the beginning of 2016, according to Boguslavsky, the gap narrowed to 30%.

He praises Bala's "phenomenal ability to raise capital, negotiate with people and run a voluminous board" and calls Snapdeal his most successful investment in India - it has grown almost 40 times. ru-Net was one of the company's early investors. Its share has since eroded, but it costs more - a Chinese giant, Alibaba Taiwanese Foxconn (iPhones are collected at the factories of this company), have appeared among the shareholders. Japanese Softbank But Bal the AmericaneBay still willingly meets with Boguslavsky's team. "He treats even small investors very well, always quickly answers questions," says Boguslavsky.

As practice has shown, it is impossible to make portfolio investments on their own, communicating with the founders only occasionally, in India.

For four years, ru-Net has invested in a dozen companies, having examined several hundred startups. "Indians in spirit are entrepreneurs and phenomenal sellers. In Russia, even strong founders often cannot sell themselves and the company. Even air can be sold here, "says Boguslavsky. The amount of his check in one round - $2-10 million, invests at stage B.

Ru-Net representatives visit India twice a month, meeting with all portfolio companies. It was not possible to limit yourself to conference calls and video calls - you do not feel a person.

"You have to

drink tea, go out to dinner with him, ask like children. Even by body language, facial expressions, you feel that you need to learn something else, "the businessman explains

.

Knowing the mentality helps to avoid mistakes. For example, Indian entrepreneurs do not like to share bad news: they do not want to offend or upset. And even monthly financial reports do not guarantee the investor an understanding of the current situation in the company: more than once, Boguslavsky's people found "inaccuracies" in audited reports, and the indicators often did not mean at all what the investor expected (for example, gross billing was called revenue - the total cost of advertising, and not the commission of the service from it), there was also a frank deception.

Boguslavsky entered the Indian market at a good time. After the rapid growth in 2011, there was a correction of startup estimates. Where does Boguslavsky invest? At the very beginning, he selected projects just from the field of e-commerce - the industry was understandable to him after the experience of Russian investments. "E-commerce is simply made for India. It essentially replaces the niche of civilized shopping centers and malls, which are only in large cities. Plus, the smartphone market and Internet access are growing rapidly, "says Boguslavsky.

But everything turned out to be not so beautiful. The capital boom led companies to compete in terms of the amount of capital raised, rather than technology and management. Investor money often went to marketing campaigns. But if in developed markets this leads to the accumulation of a loyal base, then in India, says Boguslavsky, this does not happen: the client visits five sites, buys something somewhere, but does not remember where. As a result, the fund changed its strategy, starting to look closely at models that used precisely the imperfection and uniqueness of India. For example, Snapdeal focused on not the largest cities, where there are fewer competitors and consumers are not spoiled.

Investment in India's FreeCharge

The first investment together with Sequoia - in FreeCharge, a platform that allows you to pay your mobile phone bill online - turned out to be more than successful. Indians almost did not use bank cards - receiving a salary, people first of all rented it from an ATM. The bill for the phone was replenished by $1-2 offline - from the same phone sellers, as it was in Russia ten years ago.

FreeCharge founder Kunal Shah, a graduate of the College of Philosophy in Mumbai and winner of an MBA degree, has figured out how to teach compatriots to pay for a phone via the Internet. For each payment through its service, the subscriber received a coupon for a discount from one of the merchant partners, for example McDonald's. And the commission for replenishing the account of the platform is paid by the telecom operator. At first, however, about a third of the transactions did not take place - there were problems with the payment gateways of partner banks. Then FreeCharge launched its own online wallets. And later Kunal Shah completely created a payment system on the basis of his service, starting to accept payment not only for mobile communications. At the beginning of 2016, according to Boguslavsky, the service is used to 400 000-500 000 transactions daily.

"FreeCharge is an example of a company that has been changing its approach to the business model," says Boguslavsky. This is another feature of Indian entrepreneurs: they easily transform businesses if problems arise with the existing business model.

"In Russia they will rest until the last, until their heads enter the wall. They will look for new investors, the apartment can be mortgaged, "the businessman explains. Most of all, he was amazed that Kunal Shah himself brought a potential candidate for the post of CEO to the board of directors, explaining that this would unload him for strategic work on the future of FreeCharge.

"It is difficult to imagine this in a young Russian company," says Boguslavsky. His fund has participated in all investment rounds since entering FreeCharge's capital. They believed in the business model and the founder.

2013: Failure to invest in India's Ola

Boguslavsky did not invest in the Indian competitor Uber - the online taxi ordering service Ola, which was supported by Yuri Milner, 2013 year. He considered that if there is already a strong international player on the market, then it will be difficult to defeat him. But he got it wrong - in the fall of 2015, Ola investors announced that it accounted for 80% of the Indian taxi market.

2014: Sale of Yandex package after Maidan in Ukraine

In early 2014, he got rid of the remaining 6% of Yandex. According to Forbes, this deal could have brought him about $330 million. The venture capital investor chose the moment correctly. Maidan has already happened, but Russia has not yet managed to annex Crimea and fall under international sanctions. By the beginning of 2016, Yandex had doubled in price.

2015

Investment in 2GIS

In 2015, Leonid Boguslavsky and Baring Vostok together invested in a mapping service 2GIS Novosibirsk businessman Alexander Sysoev.

Sale of India's FreeCharge

In 2015, FreeCharge bought the online marketplace Snapdeal, another company from ru-Net's portfolio in India. Boguslavsky says that during the transaction, the payment service was valued at $500 million, but does not disclose the size of its share.

The Vedomosti newspaper, citing a source, estimated it at 15%. "Snapdeal bought FreeCharge for the cache. We got the money, beat back all the investments and pass on to Snapdeal shares, "says Boguslavsky.

The first hit in the global Forbes rating with a fortune of $1.2 billion

At the end of 2015, Leonid Boguslavsky first entered the Forbes global rating with a fortune of $1.2 billion, a significant part of which is Indian investments.

2016

As of March 2016, for business meetings in Moscow, the personal foundation of Boguslavsky ru-Net uses a couple of small rooms in a business center on the Garden Ring. The headquarters moved to Riga. "Often my office is an airplane seat," Boguslavsky says.

2019

Sale of stake in Ozon for $70 million

In the Russian market, one of the largest assets of the businessman until 2019 remained the share in the online retailer Ozon, which he owned for 19 years. As Kommersant reported on September 13, 2019, Leonid Boguslavsky's funds left this business. The businessman's structures owned about 11% of Ozon, for which they received about $70 million (4.4 billion rubles), a Kommersant source said.

1800% on Datadog investment and 8% control

Among the large shareholders of Datadog is RTP Ventures, a member of the RTP Global investment holding of Russian IT investor Leonid Boguslavsky. According to the IPO prospectus, RTP Ventures in October 2019, after the placement, controls 8.2% of the shares, or 8.1% of the votes in the company. Based on the current capitalization, such a package costs about $859 million. 'I wasn't selling anything. Retained all shares. I really believe in the company, "Mr. Boguslavsky told Kommersant.

After the IPO, the stake of the Russian investor, who retained the shares, has risen in price by about 1800% in a few years.

RTP Ventures invested in Datadog in 2012 during Round A, the total volume of which was $6.2 million, in 2014 - during Round B for $15 million and in 2015 - during Round C for $31 million, recalls Vadim Merkulov, director of the analytical department at Freedom Finance. According to him, the minimum yield of RTP Ventures on invested money exceeds 1800%. The re-subscription for Datadog's IPO was very high, the company's value is explained by the growth dynamics of its business, the analyst points out: Datadog's revenue growth rate in 2018 was 97%, in the first half of 2019 - 79%. Among its competitors are IBM, Microsoft and others, but in this segment it is still easy to increase volume due to the growing market as a whole, a slowdown in growth rates can only be noticed in two to three years, Mr. Merkulov believes.

So far, few Russian investors have led their portfolio companies to an IPO, and the risks associated with Russia are too high, says a Kommersant source in one of the American investment banks. However, even the presence of Leonid Boguslavsky in the so-called Kremlin list (a list of high-ranking Russian politicians and oligarchs published by the US Treasury in January 2018) did not prevent Datadog's IPO, investors interviewed by Kommersant admit.

2021

Joining the Veon Board of Directors

On January 15, 2021, the telecommunications holding Veon announced the entry of Leonid Boguslavsky into the board of directors. He took the place of former commercial director and digital director of British operator O2 Mariano de Bira, who resigned from the board in December 2020.

Chairman of the Board of Directors of Veon and member of the Advisory Board of LetterOne Technology Gennady Gazin, commenting on the appointment of Leonid Boguslavsky, noted from the investor "an outstanding set of skills and experience," which, according to Gazin, will help the company "strengthen digital products to expand customer opportunities." Boguslavsky is also a member of Sberbank's supervisory board as an independent director.

Veon's board of directors includes the company's largest shareholder, Mikhail Fridman Deezer music service CEO Hans-Holger Albrecht, Concinnity Advisors LP and IC co-founder Troika Dialogue Peter Derby, Bridge Growth Partners senior consultant Stephen Pusey, ex-Telecom Italia CEO and independent chairman Gett Amos Genish, managing partner of Spencer Stuart International To Moscow in Yaroslav Glazunov.

In addition, the board of directors includes LetterOne Technology managing director Andrei Gusev, former finance director of Norwegian Telenor Gunnar Holt, Gennady Gazin (headed the board in mid-2020 instead of Ursula Burns), Robert Jan van de Kraatz and Osama Bedier.

In 2020, in addition to Ursula Burns, three of its members left the board of directors of Veon: former top manager of the mobile operator Vodafone Julian Horn-Smith, former CEO of the Canadian mobile operator Rogers Guy Laurense and CEO of the user data research company Dunhumby Gullaume Bakuvie.^[3]

Departure from the Supervisory Board of Sberbank

March 19, 2021 it became known about the departure of Leonid Boguslavsky from the composition. of the Supervisory Board Sberbank Such a statement at a press briefing following a meeting of the council was announced by the head of the largest Russia credit institution. Hermann Gref More. here

2022

Leaving Veon's Board of Directors

On May 25, 2022, the telecommunications holding Veon announced the withdrawal from the board of directors of the founder of the RTP Global investment fund Leonid Boguslavsky and the former co-CEO of Veon Sergi Herrero, who was also responsible for the launch and development of payments and commercial opportunities Messenger, WhatsApp and Instagram (are part of Meta, which in the Russian Federation is recognized as an extremist organization and banned). Read more here.

Canadian citizenship

In June 2022, it became known that Leonid Boguslavsky with a fortune of $3.9 billion in the Forbes list of billionaires passes as a citizen of Canada.

Boguslavsky in the early 1990s briefly left for Canada to teach at the university and thanks to this work received a Canadian passport.

Scientific activity

The author of three scientific books and more than 100 articles in the field of computer theory, many of which are published in well-known scientific journals in Europe and the United States. He is a member of the American Mathematical Society and the Computer Theory Group of the International Federation IFIP 7.3.

Hobbies

At the beginning of 2016, no matter where Leonid Boguslavsky is located in the world, his schedule always provides for time for triathlon training.

Notes