July 23, 2019

How Does A Novice Investor Save Time?

Andrey Andreev, an English entrepreneur born in Russia and founder of the popular dating service Badoo has declared his readiness to invest in 10 ideas of young Russian entrepreneurs.

It is possible that St. Petersburg businessmen will be among these startups. The condition is this: it is available to technology companies with the ability to scale their projects internationally.

He did not disclose the exact amount of assistance, it is however about angel investments, which are required at the very start of the project. The purpose of this type of investments is usually to finance the bare minimum of the product requirements and check the main hypotheses of the business – whether this product will be in demand on the market, or not. “The size of the check in this case has nothing to do with business performance indicators, since they do not exist yet, however, it depends on the market, investor’s experience and entrepreneurial negotiation skills.

Russian investor Alexander Rumyantsev, for example, invests 500 thousand rubles at this stage, and in the USA a similar check can amount up to 50–100 thousand dollars,” says Alexey Komarov, managing partner of IT Business Broker.

The founder of Badoo accepts applications from startups on Instagram, so that soon his PM will be choke full of messages from his ambitious compatriots.

However, money is apparently not a problem for him.

It seems that Andreev (his real second name is Ogandzhanyants) likes to be a philanthropist.

Just recently, he promised to donate all April revenues that Badoo receives from 22 million users of the service in France to restore the Notre-Dame-de-Paris cathedral (more than 424 million people are registered on this dating service). Also, the site is in the top 50 most visited sites by the French, which is not surprising since people of this nation are quite loving. In Russia, Tinder successfully competes with Badoo.

Badoo was launched in 2006, and in 2007 a Google study showed that only iPhone is more popular than Badoo in terms of the number of requests.

In 2011, the project was recognized as one of the most successful IT companies in Europe.

Then its turnover amounted to about 150 million dollars, and the audience grew by leaps and bounds.

In 2008–2009 alone, about 80 million dollars were invested in the company: investors were chasing after shares of a fast-growing company. Andreev does not disclose the current turnover of the company.

Despite the fact that the central office is located in London, the company is registered in Cyprus. However, whatever the turnover of Badoo is, this is not the only project of Andrey Andreev.

He is also known as the founder of SpyLOG, Begun, Mamba and Bumble and is included in the ranking of the wealthiest people in the world. According to various sources, his fortune is estimated to be at least

$2.3 billion. So the newly-fledged investor definitely has money. Moreover, the dating market is already measured in billions of dollars and is growing steadily, according to experts from the Social Discovery Ventures investment holding, it grows by about 8.9 % per year. People of the 21st century believe in relationships built on the Internet: for 74 % of users of dating apps, their online chats have moved to offline.

Chances for Petersburg-based companies

Judging by the limited information, Andrey Andreev developed his own projects and did not invest in startups. “There is a risk for both sides in this: for successful investment (especially at the super-risky early stage), experience is needed, and this experience should by in investments, not entrepreneurship,” says Alexey Komarov. “Startups, in turn, may meet with high expectations and demands for a quick return on investment.”

One can assume that, by announcing the desire to help Russian entrepreneurs to prove themselves, Andreev will pay more attention to Muscovites, the residents of his hometown. However, this is unlikely to be the determining factor. The primary factor will be the access of the project to the international markets. Since we are talking about investing in IT-startups, whose success does not depend on the place of their business, entrepreneurs in St. Petersburg have the same chances as those in Moscow or any other city, says Alexey Komarov.
Saint Petersburg has a lot of robust projects founded by their developers. “Andrey Andreev did not indicate the exact focus of his investment intentions and preferred project stages, therefore it is difficult to come up with a project funnel that will suit him. Given his current businesses, it can be assumed that he might be interested in Friendzone. New options for monetizing social networks can be found in AI-based projects: Sarafan Tech and E-contenta,”says Andrey Sokolov, General Director of St. Petersburg Technopark.

If we are talking about completely new lines of business unrelated to communication, social networks and big data, then a new investor should indicate the preferred stage of development of the project in order to save his time, Sokolov said.

“Recently, more start-ups and hackathons are organized in the city, universities ramp up their activity (for example, ITMO and Polytech), there are more projects, and among them, of course, some are promising,” reminds Komarov. “When looking for investments at an early stage, entrepreneurs should use all available opportunities, and the option proposed by Andrey Andreev cannot go to waste.”