While establishing themselves as the main disruptors in the food delivery industry – fulfilling orders within 15 minutes in cities across Europe (eg Jiffy) and North America (eg Buyk) – Russian startups are also penetrating neighboring segments. From urban delivery to mobility, via local or international freight, some of them benefit from the generous support of VCs, as illustrated by four recent deals.
Next Generation Freight Broker
Last month, Fura, a Moscow-based startup that offers high-tech services to truck drivers, attracted 600 million rubles (about $7.5 million) from a fund managed by Fort Ross Ventures. The deal came just over a year after Fura’s previous funding round – $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 “very manual and fragmented with negotiation-based pricing, repetitive phone calls and no visibility into shipments.” The Russian startup serves a variety of large and small clients in Russian-speaking countries as well as the United States.
Fura told Forbes Russia he made more than 14,000 shipments to the United States last year, generating some $20 million in revenue.
Fura also displays an ambitious M&A strategy: “We acquire and grow freight brokerage companies by equipping them with our proprietary and groundbreaking technology,” Fura states on its website.
The startup claims that “businesses grow 2.2x year-over-year and profitability increases 68%” after adopting its platform.
“We provided venture capital debt on top of venture capital funding,” said Masha Eliseeva, IR/PR at Flashpoint VC (ex-Buran Ventures), in an exchange with East-West Digital News. “The company is led by strong founders who have been able to expand from Eastern Europe to the United States. There is also a robust technology product, which has good market potential,” she added.
Delivery activity in emerging countries
An international venture capital firm with connections across Eastern Europe, Flashpoint VC is also an investor in Borzo. Previously known as Dostavista, this delivery service made headlines in late 2021 when it acquired Indian bike-taxi startup Now.
A few months prior, Borzo had completed an impressive Series C funding round, raising $35 million from a host of major international investors.
Founded in 2012, Borzo is now one of the world leaders in its field. It operates in 10 emerging countries: Brazil, India, Indonesia, Malaysia, Mexico, Philippines, Russia, South Korea, Turkey and Vietnam.
Russian electric scooters from Portugal to Hungary
Still little known internationally, kicksharing service Whoosh is a market leader in Russia with a claimed market share of 45%. Launched in April 2019, this company started with 20 scooters in Moscow, before expanding to Saint Petersburg and Novosibirsk.
Whoosh told EWDN that it currently operates in 24 Russian cities, using 45,000 Ninebot Max Pro scooters with custom, in-house developed hardware and software. The company claims to have been the first in Russia to offer a stationless e-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 – from Lisbon 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 public financial institution. They injected a total of $25 million 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” despite his recent SPAC misfortune – says his new invention will ship goods between Europe and Australia in just hours .
His company Destinus is building a hydrogen-powered, zero-emission transcontinental cargo drone. With hypersonic cruise speeds of Mach 15, 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 funding round that ran from August 2021 to February 2022, Destinus raised up to $29 million, according to CrunchBase data, to make that dream come true.
A generation of tech heroes
Russian-speaking founders have a number of competitive advantages in international markets for several reasons, Eliseeva believes. “Usually these founders have a very solid technical background and a good understanding of their products. Plus, they get access to cheaper talent pools, which is what everyone is looking for these days. This allows them to spend less capital and go further from a revenue standpoint than their US or other peers.
These founders may be less experienced in sales/marketing than founders in other geographies, Eliseeva concedes – “but that pushes them to iterate more and hire high-level people at an early stage of development.”
“Overall, considering 300,000 graduates from technological universities each year – which is one of the highest numbers of graduates in Europe – we are going to see more and more Russian-speaking founders asserting themselves on a global scale”, concludes -she.
“Eastern Europe has generated a brilliant generation of tech entrepreneurs whose companies are now coming of age,” confirms Adrien Henni, editor-in-chief of EWDN, in his CrunchBase column.
Starting their businesses 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 huge capital injections; they tend to lift less, and later, than their Western peers.