"No Gravity": do Russian roots hinder startups abroad?

For startups with Russian roots, the first two years after the outbreak of hostilities in Ukraine were a failure. Now the peak of tension is over, but they are forced to choose a new development strategy. How has the venture capital market changed for projects with Russian founders?

According to the Dsight venture capital market database, projects with Russian founders attracted $1.1 billion in venture capital abroad in January-June 2025, and $3.3 billion in the whole of last year. This year, the experts interviewed by Oninvest expect a comparable volume or even moderate growth. This is a notable result after two stressful years, during which the connection with Russia was considered toxic in the venture capital market.

Dsight defines startups with Russian roots as those whose founders were born in Russia or its territory in the USSR or were once citizens of one of these countries.

In 2024, such startups conducted 46 rounds of investment. In January-August 2025, they closed 34 rounds. There will be fewer deals in 2025, but the "average check" will increase compared to last year, says Arseny Dabbah, founder of Dsight. Sergey Bogdanov, a venture capitalist who manages the Yellow Rocks fund, believes that in 2025 the amount of capital raised will show moderate growth.

In 2024, such startups conducted 46 rounds of investment. In January-August 2025, they closed 34 rounds. There will be fewer deals in 2025, but the "average check" will increase compared to last year, says Arseny Dabbah, founder of Dsight. Sergey Bogdanov, a venture capitalist who manages the Yellow Rocks fund, believes that in 2025 the amount of capital raised will show moderate growth.

A significant portion of the bottom line in 2025 will be raised by AI startups, as it was the year before. "The main capital is now directed to the largest AI companies, with less money going to the rest," says Dabbah.

This is a global trend. According to business intelligence platform CB Insights, AI-related companies are "eating away" an increasing share of the venture capital market every year: from 2022 to 2024, their share of capital raised grew from 14% to 37%, and their share of deals from 10% to 17%. The top 5 rounds with AI projects in 2024 became multi-billion-dollar rounds. For example, AI analytics platform Databricks raised $10 billion from investors and received a valuation of $62 billion.

In 2022, the Russian venture capital market collapsed after the outbreak of hostilities in Ukraine and the imposition of sanctions. Pulsar VC, AngelsDeck and other large venture funds left the market of this country or suspended operations there. The volume of investments in startups with Russian founders both in Russia and abroad fell by 68% to $819 million, Dsight estimated. And excluding the large round of Miro, a startup that left Russia, it fell by 83%. The number of deals fell by more than half compared to 2021, from 311 to 137. The average deal size fell 2.8 times to $3 million.

By comparison, 2021 was a "breakthrough" year for Russian projects. The volume of investments grew 3.5 times in annual terms, to $2.4 billion. Foreign investors increased their investments more than 6.5 times, to $645 million (two thirds of this amount was accounted for by three deals - with TradingView, Acronis and Accel Club).

The situation in 2023 has improved, but not dramatically: during the year, Russian domestic projects closed 175 rounds. But they were able to attract 30 times less compared to the peak of 2021 - only $84 million, according to Dsight. The reason for this was a sharp decline in the average check to about $480 thousand.

Even in successful years, Western players were not very active in Russia, and many projects from this country sought liquidity in foreign markets, says Sergey Toporov, partner at LETA Capital.

And three years ago, startups ended up facing a choice: to develop their business exclusively in Russia, or strictly outside of it. In 2022-2023, according to Arseny Dabbah's estimates, Russia will lose at least a thousand startups. "Quite mature teams, serial funders, and those who have attracted investment have left the country. And not only startups, but also the majority of Russian funds left," he notes.

There is no classic venture capital left inside Russia, says Islam Midov, former head of the MTS venture fund and now an AI startup. "There are almost no new companies that could attract serious rounds. Many funders are now building more 'dividend' stories than venture stories," he says.

Among startups with Russian roots, there are two that have truly impressed the venture capital market after 2022.

These are Ilya Sutskever's AI startup Safe Superintelligence and Neon, a developer of a cloud platform for working with databases, co-founded by Ekaterinburg native Nikita Shamgunov.

The startups of Sutskever and Shamgunov are examples of venture stories where the founders' connection to Russia became a formality and did not influence their development. Born in Gorky in the USSR (now Nizhny Novgorod), Sutskever was never a Russian citizen: he emigrated to Israel with his family in his early childhood, spent his youth in Canada, and worked at Google and Open AI before Safe Superintelligence. Since its founding, investors have invested a whopping $3 billion in Safe Superintelligence, $2 billion of which the company will raise in 2025.

Shamgunov has a classic career as a "global Russian": one of Russia's best IT universities, ITMO, the start of his career in his home country and an offer from Microsoft in 2005. Then he gave up a $2 million salary at Facebook for his own business and created his first unicorn - a developer of the SingleStore database management system. The startup became a unicorn in 2022 in an investment round led by Goldman Sachs Asset Management.

Shamgunov's second project, cloud-based database platform Neon, graduated from the largest gas pedal in the U.S. Y Combinator has raised a total of $129.6 million in venture capital investment. 2025 data analytics platform Databricks has agreed to buy this project for $1 billion.

Many funders who had ties with Russia are trying to minimize them after the outbreak of hostilities in Ukraine.

An example: the fintech startup Plata, founded in 2022 by Tinkoff Bank employees. The project was set up in Mexico - it was a convenient jurisdiction where Russians could fly to without a visa and apply for work documents on the spot, Plata's co-investors - Baring Vostok founder Michael Calvey and Tinkoff Bank founder Oleg Tinkov - told Elizaveta Osetinskaya in an interview.

Plata is building a neobank whose main product is now credit cards. Tinkoff had a similar business model when it launched in Russia. The startup is run by its former top managers Neri Tollardo, Danil Anisimov and Alexander Bro. According to Oleg Tinkov, at Plata now "except for a few managers, no one even has Russian passports." Tinkov and Kalvi, along with the project's top managers and outside investors, invested $300 million in the startup. In early 2025, Plata became a unicorn: it raised $160 million from the U.S. venture fund Kora. During the investment round, its valuation amounted to $1.5 billion.

The bank has no plans to leave the venture capital market and intends to sell a 1.5% stake in the company in the near future and grow to a valuation of $3.3 billion. Tinkov and Calvi said in an interview at 2025 that they expect the startup to IPO within two years at a valuation of $10 billion.

Another typical story for startups with Russian roots after 2022 is the departure from the Russian market. One vivid example is Miro, a service for collaborative work on projects, created by Perm natives Andrei Khusid and Oleg Shardin.

From the beginning of the COVID-19 pandemic, which forced companies around the world to shift their employees to telecommuting, Miro's customer base grew by 600% through 2022, at which time the project had more than 50 million users, and 80 million in 2024. During this time, the startup opened offices closer to capital markets - in the US and the EU. Miro announced the closure of the Perm office and the cessation of direct sales in March 2022. Two months before that, the company closed a $400 million investment round.

Another example is inDrive, a service for intercity and urban passenger and freight transportation. The project grew from a small Yakutian public forum in VKontakte, where driver and passenger negotiated the price of a ride directly, into a company whose value is estimated at $1.23 billion. The company entered the American market in 2023, where it became a competitor to Uber and Lyft. In 2022, inDrive moved some of its team to Kazakhstan, Cyprus and other countries, and a year later ceased operations in Russia. It is now focusing on development in Latin America, Southeast Asia, Africa and the CIS.

For two years in a row, InDrive has raised $150 million in investment each from the General Catalyst fund. The last round took place in 2024.

All of Oninvest's interlocutors agreed that the peak of tension regarding startups with Russian roots, which was observed in 2022-2023, has passed. And situations like the case of the British Immigram, a company with Russian founders, which won €1 million in investments in the prestigious Slush 100 Pitching Competition and gave up the prize because of claims of ties to Russia, are no longer foreseeable.

But that doesn't mean that all the "origin" problems are behind us.

"Now the degree is lower. But there are still restrictions: you can't keep a team in Russia, and you can't transfer money directly either," says Midov.

Until 2022, Russian funders, according to Islam Midov, had options to launch a business at home to quickly enter the EU or US markets, or to grow a major player in the local market for a subsequent IPO.

Sergey Bogdanov admits that the model of "grow a business in Russia and then sell out" has now virtually disappeared. For international investors, a working business in Russia has become a stop light, and most "Russian-speaking" startups immediately start working in the US or EU markets. "Or, at the very least, they start in Kazakhstan, Uzbekistan, Armenia, and from there they enter the global markets," he adds.

In the past, the home market attracted Russian founders too strongly, "but now this gravity is gone," agrees Midov. In his opinion, the real success stories are demonstrated by those startups who immediately set their sights on international markets. As an example, he cites Praktika.ai, an online foreign language learning project using AI, and Recraft, an AI platform and image generator.

Praktika.ai was founded in 2022 by Adam Turaev, Ilya Chernyakov and Anton Marin, and Recraft was founded the same year by Anna-Veronika Dorogush, ex-head of machine learning development at Yandex. The founders of Praktika.ai graduated from gas pedal 500 Global and started with Latin America, while Dorogush first moved her team to Dubai.

Both startups are now based in London and have raised large round A rounds, with Praktika.ai raising $35.5 billion in 2024 and Recraft raising $12 million in 2024 and $30 million in 2025.

"In the Middle East, Asia, or Latin America, everything is easier: as long as there is no threat of sanctions, they work quietly with Russian funders there. But the problem is that there is not much venture capital money there in principle - there is not enough even for local ones," explains Midov. This is confirmed by data from Statista analysts. They predict that by the end of 2025, funders will be able to attract $171.3 billion in the US venture capital market, $22.9 billion in the EU, and $440.5 million in the UAE.

But for many startups with Russian roots, the Middle East, Asia or Latin America have become the starting point for starting or reassembling a business: they go further away when faced with the "ceiling" problem, for financial reasons, agrees Sergey Toporov.

In these markets, startups close to the economies of the region's countries are of interest. For example, in MENA (Middle East and North Africa), these include oil and gas, construction, logistics and delivery services, Bogdanov lists.

One of the projects that has gained a foothold in the Middle East is the fintech startup Tabby, which allows customers to buy goods in installments and pay for purchases with branded cards in offline stores. It was founded back in 2019 by ex-LaModa development director Dmitry Barkalov and UAE entrepreneur Hosam Arab. In 2023, the company, which by then was operating in the UAE, Kuwait and Saudi Arabia markets, moved its headquarters to Riyadh in preparation for a possible IPO on the Saudi Stock Exchange.

In 2025, Bloomberg, citing insider information, wrote that Tabby hired HSBC, JPMorgan Chase and Morgan Stanley to prepare for the listing. The project topped Forbes Middle East's ranking of 50 promising fintech companies in the Middle East. According to Crunchbase, the company has raised a combined $1.9 billion and was valued at $3.3 billion in its latest round in February 2025. According to Wamda, a service that analyzes entrepreneurship and venture capital markets in the Middle East, Tabby is now the most valuable startup in the Middle East and Africa.

This article was AI-translated and verified by a human editor