- Some VC firms have distanced themselves from Russian investment following the invasion of Ukraine.
- The potential impact of sanctions could hit the backers of some VCs.
- Insider approached a number of VC firms with known ties to Russia.
When Moscow-born billionaire Yuri Milner’s DST Global joined a $400 million investment round in Twitter in 2011, few eyebrows were raised at the time, despite the vehicle raising some of its funds from the Russian state-owned VTB Bank.
More than a decade later, the invasion of Ukraine has raised a specter of Russian cash going into European tech startups through venture capital firms like DST Global. Insider approached several VC firms who have or had known ties to Russian investors to comment on any impact from sanctions.
Already, the London Stock Exchange Group has temporarily suspended trading in shares of VTB Bank after the UK’s financial watchdog moved to protect investors. The bank could also be delisted from SWIFT, the financial payments network, the Wall Street Journal said.
The extent of the links that European VCs have with Russian LPs is unclear: the investors in VC funds are often shrouded in secrecy. Any fund with Russian LPs or oligarchs may be impacted by sanctions.
A DST Global spokesperson said in a statement that VTB Global was “a passive investor in one of the DST Global entities that invested in Twitter alongside more than 40 other investors,” with the entire position fully divested in 2014.
The representative added that the firm’s funds have not raised capital from Russian or Ukrainian LPs since 2012, and none of its funds have or have had sanctioned institutions or individuals from any country as its investors.
“DST Global has invested over $12.5 billion in over 80 companies between 2009-2021. Less than 3% was raised from Russian institutions as limited partners, all prior to 2011, and was fully returned by 2014,” the spokesperson said.
Tatiana Evtushenkova, CEO and managing partner at London-based Redline Capital is the daughter of Vladimir Yevtushenkov, the billionaire majority owner and chairman of Russian conglomerate Sistema.
Yevtushenkov has been a controversial figure among Russia’s elite. In 2014, he was placed under house arrest over accusations of money laundering after Sistema took control of oil firm Bashneft. He subsequently gave up control of Bashneft to the state. In a signal he was back in favor, he was later part of a presidential delegation of representatives visiting Crimea, which Russia had annexed from Ukraine earlier in 2014.
In 2018, Yevtushenkov came under investigation from the US Department of State for “operations in illegally annexed Crimea”, though Sistema denied any such operations.
An investor book published in May 2018 stated that “Redline’s funds originate from Vladimir Evtushenkov”. Redline Capital did not respond to Insider’s requests for comment.
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Meanwhile, Russian-born Leonid Boguslavsky, founder of early-stage investor RTP Global, has proven pivotal in establishing the critical infrastructure of the internet in Russia having been an early backer of Yandex, a Russian language search engine and web portal.
In 2018, Boguslavsky appeared on a list of 210 Russian politicians and oligarchs compiled by the Trump administration as part of a sanctions target list that came to be known as the “Putin list.”
However, media reporting at the time established that the list was copied and pasted from a Forbes rich list, and it was derided by Anders Aslund, an economist and Russia expert who was originally consulted on the list.
“The US government has no regard for this list, nor do we, and nor would any LP we might wish to have as an investor in any funds that we may raise in the future,” a spokesman for RTP told Insider.
In addition, RTP said it had never raised money from Russian banks in any capacity and that the majority of its capital had come from its founder and main LP Boguslavsky, stating that he was responsible for around 99% of the capital in its current fund.
“We allow our own employees to co-invest in this fund as individuals, most of whom do, and some of whom are Russian, and those individuals on our team constitute the remainder of the fund’s Russian LP base,” the spokesman said. “Leonid is not subject to sanctions anywhere in the world nor are any of his businesses, he has no political ties to Russia and is entirely self-made.”
Boguslavsky is also the founder of swim-bike-run series Super League Triathlon. On the series’ website, Boguslavsky issued a statement where he said he could not remain silent about what was happening in Ukraine.
“I feel deeply about this catastrophic and unjustified war,” he said.
“I stand for peace, call for an immediate halt to the war in Ukraine and hope that we can begin rebuilding a safe, peaceful, and interconnected world as soon as possible.”
How the ongoing sanctions against Russia will impact Europe’s VCs remains to be seen. A spokesperson for Invest Europe – an industry body for private capital – said: “we don’t have any data” on members’ links to Russian LPs.
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