Alexander Galitsky is a businessman, scientist and venture investor. He was one of the creators of Wi-Fi and VPN technologies, patented 30 inventions and published 100 scientific papers. He founded the Almaz Capital venture fund, which has invested more than $300 million in dozens of high-tech startups.
Fund’s History
For a long time, the entrepreneur worked in the scientific field. Then he was involved in investments, was one of the heads of large companies, always had interest in technologies and saw prospects in them, was the head of the European project “Techtour” in the territory of the Russian Federation. At the same time, Cisco Systems began to work on the globalization of its activities and invited the organizers of venture funds to cooperate.
The proposal interested an investor and a scientist immersed in the field of technology. By that time, Galitsky Alexander was one of the pioneers of Wi-Fi and VPN technologies.
The purpose of Cisco Systems was clear. The developer of network equipment sought to generate demand for its products in the CIS and Eastern European markets, which means that it had to increase the level of technological projects in these regions at the expense of venture capital. Therefore, the company was ready to invest in funds that gathered promising teams.
Alexander Galitsky decided to create it, but put forward his own requirements. In particular, the Fund had to be a cross-border one, and its projects had to enter the global market. After reaching the relevant agreements, the entrepreneur founded Almaz Capital together with ex-partner of Russian Technologies fund Pavel Bogdanov, head of the UFG management company Charles Ryan, and ех-partner of the Alloy Ventures Peter Lukyanov. The key investor of the fund was Cisco Systems, which invested $30 million in it.
Development Vectors And Successful Closures
Since its foundation in 2008, the Fund has focused on the Eastern European market. Subsequently, Alexander Galitsky explained this by the fact that American companies absorb the absolute majority of promising startups at the earliest stages of their development, whereas in Europe they are often afraid to invest money in them. Therefore, venture capital would help IT projects from dozens of countries to enter the global market.
Almaz Capital began to develop rapidly. The entrepreneur noted that investors believed in it right away. Their expectations were met: already in 2013, the second fund was established. The International Finance Corporation was added to the number of its LPs, the volume of investments amounted to $174 million. Together, this allowed to expand the geography of the Fund, attract more investors from family offices and entrepreneurs.
The third fund was created with the attraction of even greater investments. The European Investment Fund became its new LP. Other organizations also invested money. Almaz Capital III was formed in 2021, its volume amounted to $191 million.
The Principle Of Selecting Startups
In an interview, Almaz Capital founder Alexander Galitsky noted that projects are carefully selected. According to him, no more than 10 out of 1000 startups receive investments.
How representatives of the Fund find promising projects:
- they contact startup managers on specialized online platforms;
- they select applications and view presentations in Portola Valley, Berlin and other cities where Almaz Capital has offices;
- they organize networking, personally get acquainted with the CEOs of startups.
In addition, the fund has a wide partners network, which also helps to attract promising projects. The entrepreneur does not hide his financial interest, but at the same time makes every effort to develop IT companies that are in dire need of investments and cannot always receive them from organizations in their countries.
Major Transactions
Over the entire period of its existence, Almaz Capital has invested over $300 million in more than 50 startups. Among the most successful transactions of the fund, experts note cooperation with the following companies:
- Acronis sets the standard for cyber protection and hybrid cloud storage through its innovative backup, anti-ransomware, disaster recovery, storage, and enterprise file sync and share solutions;
- 3DLook is the global leader in AI-first mobile body measuring and fit solutions;
- GridGain powers the digital enterprise with an in-memory computing platform built on Apache IgniteTM that provides in-memory speed and massive scalability for data-intensive applications;
- Hover is a 3D imagery company, producing a product which allows the combination of overhead and oblique imagery to produce 3D models of buildings.
- DMarket is an in-game item trading platform and a player-owned economy solution;
- The Minut sensor monitors noise, occupancy, motion and temperature in vacation rental properties.
- Mobalytics is an eSports company creating a new, more robust way for competitive gamers to analyze and improve their performance.
- Neptune is a metadata store for MLOps, built for research and production teams that run a lot of experiments.
- Nomagic provides services based on Intelligent Robotics to e-commerce and retail leaders wishing to get one step closer to full automation.
- OneSoil helps agricultural professionals monitor fields and increase yields.
- Parallels Holdings (former SWSoft) – a leading virtualization and business automation software company for Hosting and Telco provider, providing a full suite of cloud-based product offerings.
The Fund conducted transactions even during the pandemic. However, Alexander Galitsky has always noted that an investor needs to personally get acquainted with project managers. The entrepreneur explained this by the fact that Almaz Capital, first of all, invests in a team with which to work for at least 5-10 years. Therefore, direct contact is extremely important. During the pandemic, the Fund concluded deals with companies whose managers were already familiar to the investor’s representatives. In particular, with the startups DMarket and Minut.
Alexander Galitsky – Investor’s Biography
Born in the Zhytomyr region. Graduated from MIET, defended his PhD thesis while working at the Research Institute of Micro-Devices. Managed the Elvis+ Company, engaged in high-tech developments. Got into the ranking of the most influential people in the IT field according to Forbes magazine. Became the winner of the international competition organized by EY “Entrepreneur of the Year 2013” in Russia, and subsequently joined the jury of this prestigious competition. In addition, was noted by Forbes for his contribution to the development of Wi-Fi and VPN technologies.
He was awarded the title of “Pioneer in the field of technology” at the Davos Economic Forum and was nominated for The Investor AllStars Awards. In an interview, Alexander Vladimirovich Galitsky stated that he is fond of hiking, skiing and diving, and reads a lot.
Participation In Russian Projects
The investor previously participated in Russian projects, but exited them for various reasons. In particular, Alexander Galitsky was a member of the board of directors of Skolkovo, but in 2021 asked to be excluded from the board. The investor explained this by the fact that the development vector of the scientific center had shifted and as a leader he was no longer effective.
For the same reason, the entrepreneur left the expert council established under the Ministry of Communications and Mass Media of the Russian Federation. According to Alexander Galitsky, the work there was taking a lot of time and was no longer relevant.
The entrepreneur also left the Advisory Board of RVC and Alfa-Bank. He noted that the interest in the banking sector was due to the desire to understand its system from the inside and analyze the prospects for investment in the fintech segment. However, with the change of the bank’s development vector, these tasks became unattainable, and Alexander Galitsky left the board of directors. The businessman also exited Megafon and the Russian Quantum Center, Skolkovo Venture Investments and SkolTech
At the moment, the entrepreneur does not participate in Russian projects. He focuses on the development of a venture fund that mainly works with Eastern European companies.
