Kunal Bal, founder of startup Snapdeal, with amazement listening to the investor, arrived from Russia. He did not ask any questions of revenue and other financial indicators. Leonid Boguslavsky - and it was him - asked about the nuances, indicating in passing the risks faced by projects with a similar business model of its portfolio in Russia, the USA and Vietnam. "At that meeting, I" get smart "in full, - says Boguslavsky in an interview with Forbes. - They are more interested in the famous funds, it was necessary to show that they will receive from me the smart money. " The calculation was justified. Boguslavsky, according to him, has invested in Snapdeal in 2012, estimated at about $ 170 million, the company now valued at $ 6.5 billion.

At the end of 2015, Leonid Boguslavsky first entered the global rating of Forbes with a fortune of $ 1.2 billion, much of which - Indian investments. As a pioneer of the Russian venture market paved the way to India?

To the East

Boguslavsky - one of the first Russian venture investors. Capital had appeared after the successful release of their own business - in 1996 he sold konsalingovoy company PwC LVS system integrator, created after leaving LogoVAZ Boris Berezovsky. After becoming a senior partner after the deal PwC, he closely followed the development of the dotcom and Internet business in emerging Russia.

In 2000, Boguslavsky with a pool of investors, which included Baring Vostok funds, of UFG and Rex Capital, created ru-Net Holdings, and invested in "Yandex" start Arkady Volozh and Ilya Segalovich. "In" Yandex "while many foreign funds were not ready to give and the dollar", - says Boguslavsky. After a few months, PwC's leaving, he invested in the online store Ozon. Then there were the successful investment in coupon service Biglion, online cinema ivi.ru.

However, the investor no longer Boguslavsky "Yandex". Part of its shares sold another businessman in 2011, earning the IPO the largest Internet companies then Russia about $ 70 million, and in early 2014 got rid of the rest. According to Forbes, the deal could bring him about $ 330 million.

Moment venture investor chose right. Maidan has already happened, but Russia has not yet had time to join the Crimea, and fall under international sanctions. Since then, "Yandex" has fallen in price twice.

Share in Ozon at Boguslavsky remained, and it still works closely with Baring Vostok. In 2015, together they have invested in the mapping service 2GIS Novosibirsk businessman Alexander Sysoev. But it is rare for the past two years, an example of the appearance of new Russian projects in its portfolio. For business meetings in Moscow, ru-Net Boguslavsky Wish Foundation uses a pair of small rooms in the business center on the Garden Ring. The headquarters moved to Riga. And business interests Boguslavsky has long been concern not only to Russia, where he earned the first really big money. "Often my office - a seat on the plane," - says Boguslavsky. But wherever in the world he may be, in its schedule always provides time to train for a triathlon.

In August 2011, he launched a new RTP Boguslavsky fund in the US - now has about 20 projects. Simultaneously started by ru-Net to invest in Europe, becoming, for example, one of the first investors in the German company DeliveryHero, estimate that in the last round in 2015 was $ 3.1 billion. But Boguslavsky knew it a competitive advantage over large Western funds - experience of working in Russia, which can be applied in other emerging markets.

The most obvious candidate - China. But there, as explained Boguslavsky, require much more money to invest than the fund could afford. "China has very quickly become a fashionable topic. Any local entrepreneurs who have done something, immediately aroused the interest of the press in the US, they have a status. In India, too, there are billions of dollars of the company, but few can name them all. China as a whole gives a handicap of interest ", - he says. Because of this, in China works more funds go to a project can only at a later stage at higher valuations.

The Fund began to look at Southeast Asia, Turkey, Brazil and India. The potential of India, where Boguslavsky once traveled by jeep, in his opinion, no less than Chinese.

"It was my political solution. Do not even discussed, "- says Boguslavsky. It seemed that can work in India as well as in Russian. This proved to be true only for 50%, Recognizes the billionaire is now.

Venture investors from the Russian market in the Indian unit. Gleb Davidyuk, managing partner of the fund iTech Capital, recently a lot of investing outside of Russia, said that from the point of view of macroeconomic indicators, India - an ideal place for investors at all stages. Why he is not put back? "As with any emerging market, it requires localization, so the presence on it physically is essential. For us, India is a strange market, though growing, "- explains Davidyuk.

"Boguslavsky hardly not the only one at the time of our arrival in India invest in local venture and did it successfully", - says Andrey Terebenin, the head of the newly created Sistema Asia Fund, an Indian venture fund AFK "System" (the corporation in 2008 will invest in local TV).

The first two Boguslavsky investments in India have not been very successful. He knew he did not do without a local partner. Mediators immediately began to offer their services. But as an investor remembers one conversation enough with them tonot to meet anymore. Finally, at the Intel conference, he met with the founder of Smile Group Harish Balsam, and they liked each other. In mid-2012, ru-Net has invested in two projects Smile Group - online shopping site Freecultr (clothes) and BeStylish (shoes). Experience in the business of nurturing the fund was Boguslavsky people every two weeks to fly to India, trying to sort out with the companies and the market. But startups never took off.

The main reason, according to Boguslavsky, that Ball worked as a business incubator: himself only to generate ideas and to implement them hired by the CEO. "His lessons we have learned. The company must be the founder, ready to dig the ground to succeed their offspring, "- says Boguslavsky, who no longer invest in the company, the founders of which are not at the helm.

Two startup fund has invested about $ 17 million. One company was able to sell, though cheaper investments, and the second is still in its portfolio, but its value is not growing as fast as in other investments. But Boguslavsky does not regret the error: "It's like billiards. If you want to learn to play well, play with moneystrong players. And you have to lose a certain amount of money to learn. " In addition, it managed to get to know the Indian market and to meet with the local managers of global funds. Prior to this fund ru-Net was a dark horse for the local market, its success no one heard in Russia.

Since then he has made it a rule to enter the start-up only on condition that prior to him or with him to come to the fund, you can trust and who has an Indian office. "We have to do everything yourself, your team. But since we are not there, we need people who are not your employees, and themselves market players. Less than a conflict of interest if they invest ", - he explains. The third investment ru-Net in India took place just in such a scenario: a partner was an Indian division of Sequoia Fund.

In Boguslavsky had connections in the head office: managing partner of its US fund RTP Cyril Sheinkman - a native of Sequoia. But the Indian representative of US funds, as it turned out, lived apart and make decisions independently. "Investment business - it's human relationships.The particular person determines whether or not to give the opportunity to co-invest. Our knowledge of the business in Russia appeared valuable: some things with which India had to face tomorrow, we've already done, "- explains Boguslavsky.

Trust relationships with top managers of the local Sequoia developed after a conference in Singapore, where the team went Boguslavsky. Common themes found quickly - the fund was also an investor startup Freecultr. "They showed us everything its investment in India could only remove the cherries from the cake" - says Boguslavsky. He noted the openness as one of the features of the venture capital market in India. And start-ups and funds understand that this is the only way to raise large rounds on a large number of international investors. "In Russia, you must first send or receive a promising proposal and then appointed by the meeting. In India, the potential partners can meet just to exchange views, "- tells about the market specifics subframe Kohli, head of the Russian representation of the Indian manufacturer Micromax smartphones.

His first investment together with the Sequoia - in FreeCharge company, a platform that allows you to pay online through a mobile phone - was more than successful. Bank cards Indians almost never used - getting paid, people are the first thing removed it from an ATM. Filled up phone bills of $ 1-2 is offline - at the same phone vendors, as it was in Russia a decade ago.

Founder FreeCharge Kunal Shah, a graduate of the Faculty of Philosophy College in Mumbai and holder of degree MBA, figured out how to teach fellow countrymen to pay for your phone via the Internet. For each payment through its service subscriber to get a discount coupon from one of the merchant partners such as McDonald's. A commission pays operator for the completion of the platform account. At first, though, about a third of the transaction did not take place - there were problems with payment gateway partner banks. Then FreeCharge launched its own online wallets. Later Kunal Shah and all created on the basis of its service payment system started accepting payment not only for mobile communication. Now, according to Boguslavsky, through the cervis committed 400 000-500 000 transactions daily.

"FreeCharge - an example of a company which changed its approach to the business model," - says Boguslavsky. This is another feature of Indian entrepreneurs: they are easy to transform the business, if the existing business model problems. "In Russia, will abut to the last, until the wall head will not be included. Will seek new investors can lay flat, "- explains the businessman. Most of all he was struck that Kunal Shah himself brought on board a potential candidate for the post of CEO of, explaining that it will unload it for strategic work on the future FreeCharge. "The young Russian company is difficult to imagine," - says Boguslavsky. His fund from the moment of entering the capital FreeCharge participated in all rounds of investment. The business model and founder believed.

In 2015, it bought the business FreeCharge Snapdeal online marketplace, another company from the portfolio of ru-Net in India. Boguslavsky said that in the course of the transaction the payment service has been estimated at $ 500 million, but did not disclose the size of its stake. "Vedomosti" newspaper witha reference to the source is evaluated it in 15%. «Snapdeal FreeSharge bought for cash. We got the money recaptured all investments in stocks and shift Snapdeal », - says Boguslavsky.

major boom

Transactions in India closed quickly. On the conditions negotiated for two to four weeks after the first meeting, one and a half or two months spent on due diligence, preparation of documents and closing the transaction. In recent years, India's booming capital: promising local start-ups looking for major US funds, a lot of money is coming from Asia. It tells the subframe Kohli, India to attract foreign investors, funds in the IT-industry, even government agencies operate. "Capital nabuhivayut lot of new inputs, more and more, and the outputs of the problem. In terms of liquidity in this market story is not very good, requires an understanding of local realities "- warns Andrey Terebenin.

At the same time the Indians - a fairly soft negotiators, the founders are not fighting for every item in the shareholders' agreement, both Russian and European businessmen. Why deal go easily? If all goes badly, then carefully proptoboggan conditions no one will save, and if the business shoot, there will be new rounds on the new conditions. "Earn give everything", - says confidently Boguslavsky.

Snapdeal founder Kunal Bal and major global Bessemer fund agreed to the deal in the first meeting - its conditions written on the whiteboard marker in the negotiation. Boguslavsky not had time to participate in the round, he only came to India. In Snapdeal ru-Net invested in 2012.

Boguslavsky met all over the world with companies operating on the coupon model as Groupon. In the US, he talked with LivingSocial, in Russia - has invested in Biglion. In India, such a model while promoting Snapdeal. And he liked the founder. Ball received an engineering degree from the University of Pennsylvania, a business degree - at Wharton, he worked at Microsoft. But the software giant reduced its authorities have refused to extend the US visa, and had to return home. Together with a friend, he launched coupon service, on the basis of which Snapdeal was established in 2010.

Then the company refused coupon model, becoming the online trading platform that combines a variety of vendors tovas from saris to gadgets. By the time India was already a large online store Flipkart, among which a lot of investors with "deep pockets" of funds, including Tiger Global and DST Yuri Milner (at one time it was Boguslavsky introduced him to Alisher Usmanov). The local office in India was at the online store Amazon.

But the chances of success have been Snapdeal. Flipkart works on the traditional model of online store with large warehouses, large staff of personnel, warehouse stocks. At Snapdeal, on the contrary, through its own distribution centers was only a fifth of goods, the rest was directed to the buyer directly with sellers warehouse.
two shopping strategies differ in geography: Flipkart guided by the big cities, and Snapdeal - on average. "We felt that the approach Snapdeal more scalable," - says Boguslavsky, who met with the entire team visited the startup and its stock. When he invested in Snapdeal, its sales were twice less than that of Flipkart. Now, according to Boguslavsky, the gap has narrowed to 30%.

He praises of Bala "a phenomenal way tospine to raise capital, to negotiate with the people and manage voluminous Board of Directors "and calls Snapdeal its 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 washed away, but is more expensive - among shareholders were Chinese giant Alibaba, Taiwanese Foxconn (the factories of the company collect "iPhones"), a Japanese of Softbank, the US eBay. But the ball is still willing to meet with Boguslavsky team. "He is a very good attitude to small investors, always quick to respond to questions", - says Boguslavsky. As demonstrated by his practice, let portfolio investments to chance, talking to the founders only occasionally, in India it is impossible.

For four years, ru-Net has invested in a dozen companies otsmotrev with several hundred startups. "Indians in spirit phenomenal entrepreneurs and salespeople. In Russia, even strong founders are often unable to sell yourself and your company. Here you can sell even the air, "- says Boguslavsky.

The amount of his check in the same round - $ 2-10 million, invests nand step B. ru-Net representatives are in India, twice a month, meeting with all portfolio companies.

Restrict conference colas and video could not - you do not feel human. "It is necessary to drink tea, go for lunch, ask the kids to him. Even body language, facial expressions feel that something has to be more to learn, "- explains the businessman. Knowing the mentality helps to avoid errors. For example, Indian entrepreneurs do not like to share the bad news: do not want to offend or upset. And even monthly financial statements do not guarantee the investor to understand the current situation of the company: more than once people Boguslavsky found "inaccuracies" in the audited reports and performance often means something quite different from what investors expected (for example, revenue called gross billing - the total cost of advertising, no service fee from it), and met a frank deception.

Boguslavsky entered the Indian market in good time. After rapid growth in 2011, there was a correction startups estimates. The second wave of ru-Net investments came in 2015, when the new adjustment: many invetori feared that the Chinese market will affect the fall in India. "But now all I calmed down. India had convinced themselves and others that it is an island of stability ", - says Terebenin. He believes that the assessment of Indian companies disperse local leaders of e-commerce, they define "ultraboundary upper threshold."

Andrey Romanenko, the fund shareholder Run Capital, notes that India is attractive to its online segment: "This is probably the fastest growing market, with an annual user increase of more than 20%." It should be understood that they live here in poverty, retail is unorganized - tents in a square meter, where the owner of not only the work but also live. But the share of international retailers are not more than 2%.

"Investing in Indian projects certainly has risks, but they are more than covers the possibility of exponential growth - the entrance to the project at a low estimate, incomparable with global peers, and rapid exit with multiple multiplier" - draws prospects Romanenko market.

Where to invest Boguslavskyth? In the beginning, he chose his projects just because of the scope of e-commerce - industry has been clear to him after the experience of Russian investments. «E-commerce is simply created for India. It essentially replaces the niche civilized shopping centers and malls, which are only in major cities. Plus the rapidly growing smartphone market and access to the Internet ", - says Boguslavsky.

But it was not so great. equity boom has meant that companies have to compete for capital raised, rather than technology, and management. Investors' money often went to the marketing campaign. But if the developed markets it leads to the accumulation of a loyal base in India, says Boguslavsky, this does not happen: the client comes to the five sites, somewhere buys something, but does not remember where. As a result, the fund changed the strategy began to look closely to the models who used it, and the imperfection of the uniqueness of India.

For example, Snapdeal not focused on the major cities, where competition is less, and consumers are spoiled. Another Fund's portfolio companies, AppsDaily, has built offline distributive networks mobile applications in regional cities: the majority of the local smartphone buyers never had computers, they need to explain the whole concept of the application, learning to use. Faasos project closes the gap between cheap street food and expensive restaurants: the city is divided into sectors, each with a small open kitchen, and the nearest free courier delivers food to customers. "In fact, this model of Uber in different spheres of life. They use technology to create an infrastructure around the local spots "- says Boguslavsky. Around the same technology used and PepperTap, service delivery of fruits and vegetables from the nearest shops.

But to invest in a local competitor of the Uber - online service taxi of Ola, who was supported by Yuri Milner - Boguslavsky did not in 2013. He felt that if the market already has a strong international player, it will be hard to beat. But he was wrong - the fall of 2015, investors Ola announced that it accounts for 80% of the Indian taxi market.

Indian entrepreneurs like to use western business model. "We are now pssmatrivaem to 10 cases per week. And a good half of them - copy-paste Americans. And here our experience in Russia of the 1990s is very useful "- says Terebenin. But Boguslavsky notes, if one copy of one work well in Russia, in India even to break in the model need to seriously tighten up, customize and rearrange.

He was confident that, despite all of the features, Indian market is huge, "stick, really, could turn into a golden apple tree with the right approach." But many expectations have not been confirmed. For example, there was an illusion of cheap labor. In the office of any average company there are boys who wiped the dust and bring coffee, press the button in the elevator. But it turned out really cheap is the work of those whose efficiency is low. "The price of the functions in the best case is the same as in Russia", - says Boguslavsky.

New stars, he seeks not only in India. In America, he is looking at the technology, and in the rest of the world - especially in the consumer Internet. Sometimes the stars return to Russia: found them in California start-up with Russian rootss GridGain recently started to work closely with the Savings Bank. In February Boguslavsky paid a three-day visit to Israel, spoke with Internet companies, biotech startups and telecoms. "I wanted to look at young entrepreneurs. It's very interesting - to look for new companies, "- says 64-year-old entrepreneur.