If 500 has learned one thing from investing in over 75 countries, it’s the importance of placing bets in all the right founders and helping build ecosystems for them to thrive in. 500 is a firm believer of the idea that talent can be found everywhere, but you have to understand where that talent is and what unique challenges they are going to face in their region. One of these often-overlooked regions is Russia, which despite challenges, has a booming tech and startup ecosystem.
Last year, 500 partnered with Sberbank—Russia’s largest bank and a leading global financial institution—to launch an accelerator in Moscow, bridging the gap in knowledge and social capital between Silicon Valley and Russia. Thirty hand-selected startups took part in nine weeks of education and mentorship, culminating into a demo day that was attended by more than 700 investors and partners in the region.
I caught up with two of the founders from last year’s program, Anna Mesheryakova, CEO of Third Opinion, and Konstantin Sonkin, PhD and founder of i-Brain.tech, to hear more about their experience in the 500Sberbank program and as founders in Russian startup ecosystem.
500: What is the startup ecosystem like over in Russia?
Anna: The Startup ecosystem in Russia is underdeveloped and not fully-formed yet. It is not common for Russian entrepreneurs to speak publicly about their business ideas, plans, and investments. I think one of the reasons is a lack of trust, and it will take time for this culture to change. In addition to that, the venture capital ecosystem in Russia is comparatively weak. The most visible startup movement is now developing around the larger corporations, banks and the Big Four auditors.
Konstantin: The startup ecosystem in Russia has a strong basis thanks to accessible tech-oriented higher education. At the same time, the ecosystem lacks access to the market, which is controlled by corporations and the government. Innovations and startups are judged mostly as research initiatives, rather than high margin business opportunities.
500: What are some unique challenges that you’ve faced while building your business in Russia?
Anna: We don’t associate our business challenges to the region. They are quite common: certification, building professional community trust, and product-market fit. Third Opinion comes out with innovative AI-services for the healthcare system, we are transforming the existing processes, which makes us a “disruptive technology” with all corresponding barriers and difficulties.
Konstantin: One of the unique challenges in Russia is high barriers for building independent fast-growing businesses – both in legal and fundraising aspects. It leads to a self-explanatory situation when Russian VCs prefer funding startups incorporated overseas.
500: What was your favorite thing about the program last year?
Anna: The mentorship program was outstanding and extremely helpful. 500 Startups mentors are awesome and some of the top experts in the whole world.
Konstantin: I liked many aspects of the program last year. First of all, I should highlight it’s focus on subjects that mattered most for the business. The focused efforts of mentors, founders and advisors allowed us to obtain significant results.
500: How has your business grown since you completed the program?
Anna: We have launched two new products and signed two contracts with customers. We agreed to work with two advisors in the US and are now in the business development process for the first LOIs with American customers.
Konstantin: Quite a bit has happened since completing the program. We entered the European market and started sales of our neuro-rehab complex in the EU. We developed a new product line as well as a product for the rehabilitation and neuro-training of athletes (the first product for soccer players is available for pilots). We also started operations in Israel and founded a headquarters in Israel with the goal of global sales and fundraising.
500: Do you have any advice for other entrepreneurs looking to build and scale their business in Russia?
Anna: Don’t be afraid and just do it. It is going to be difficult, but it is worth it in the end. Take advantage to learn from the international mentors, be international, be flexible, be ready to change yourself before the startup ecosystem in Russia changes to make things easier. Join the era of big changes and play an important role in the game.
Konstantin: 500 Startups and Sberbank is the best opportunity available in Russia for entrepreneurs looking to build a startup, capable to be successful globally, while maintaining close ties and opportunities in the Russian market.
Third Option and i-brain.tech, like so many in the 500 Startups’ community, found success because of the people behind the brand. What truly sets apart the 500 Startups programs is our ability to locate under-resourced entrepreneurial ecosystems, identify the best founders in the region, and give them the resources that they truly need to scale their companies.
Applications for Batch 2 of the Sberbank-500 accelerator are open now and close on October 6th. You can apply here.
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