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Friday, 13 April 2018

Have you met The Russians? Revolut and Telegram have.



We were asked to provide some good news by a reader. That's quite difficult if we want to give you the facts. However this is an interesting illustration of the problems all things Russian have today.


As Im sure you all know, Revolut is the baby of a Russian parent. Recent news, which we were told was good news, reveals that there is a possible funding round for Revolut being led by DST, founded by the Russian venture capitalist Yuri Milner . This, if it happens, would push Revolut almost overnight into the Unicorn Club. It would also give Crowdcube investors a theoretical return of 30X.  You see we can do good 'news'.

But 'stoy' we cry. A recent development with the Telegram Chat App has led to the Russian Government blocking access. Telegram claims 9m Russian users. Telegram is owned by a Russian, Paul Durov. It recently completed a £1.2bn ICO. The reasons given for this block is that the company failed to give the Russian authorities access to the data of its subscribers. This is a so called security measure. The company originated in St Petersburg but left and is now in Dubai.

So when you hear that the company you invested in, Revolut for example,  has Russian connections, you should maybe factor this into your investment decision. Crowdfunding investors in Revolut came from Crowdcube and then Seedrs.

8 comments:

  1. Interesting but the Russian parent of Revolut is actually a British citizen. The fact that he originally came from Russia has no legal bearing. Any investment made by DST would be financed through western financial institutions and not from Moscow so again has no bearing. I feel this is a bit Russia bashing.

    Next you will be saying that the Evening Standard, Chelsea, Arsenal and Warner Music are all in imminent trouble due to Russian owners

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  2. All fair points. Not sure how you know that the DST money would come via western financial institutions. But of course it has some bearing - the UK is the largest laundromat for Russian cash in the world. And Arsenal are certainly in imminent trouble but for footballing reasons. I think Storonsky has duel GB and Russian citizenship - he was born in Russia. It was really just a curiosity piece - not meant to offend. Maybe we just stick to the bad news.

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  3. I assume that the DST funding would have to come via Western institutions because of the sanctions. Regardless they will only have a minority stake so it is unlikely to go down the EN+ route which recently crashed. I think Revolut is an interesting case as it is potentially the only crowdfunding to actually be successful for crowdfunders as they only did it for PR and shareholders received the same rights and share class as the VCs that pumped in £50m.

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    1. How do you know what shareholding DST will have - we dont seem to know what they are investing yet - total round is now looking like possibly over £200m. And how do you know that both CC and Seedrs SH have the same rights? Revolut has ord shares - about half the total and A and B prefs. I could I assume issue a new class as well?

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  4. Agreed that we don’t know much about the DST deal but I doubt the founder would give up much control as he seems to want world domination. On companies house you can see that the C class preference shares that Seedrs has is the same as Balderton capital, Index Ventures and Ribbit which led the £50m round. Not too close to the CC details but looks like they are B shares with the same rights as VCs who led the first round.

    The founder owns c30% of the shares so it looks like the VCs can’t be steamrolled.

    Direct link pasted below:

    https://s3-eu-west-1.amazonaws.com/document-api-images-prod/docs/3yNqYW6WpHd7d76zld-UOP5G2kuZ6Tio8NSZfxbDKaI/application-pdf?AWSAccessKeyId=ASIAIW2LKH7JCR6VLGKA&Expires=1523642758&Signature=CMR8jgmXLOCrHa%2FkJ3ID4ZIGuVY%3D&x-amz-security-token=FQoDYXdzEEkaDH%2FS1nwAwdEtS8V7EiK3A%2Bu9lqD%2BwSp3pWX9YRHWkka3X68J6UFyqbMOg3kU8kM%2FNsQnbxQ88RhWT2TebcdKluI%2FKsti2WNrzNxwyGUFIgVqljET4oDhO%2B0gugYN49vBg3cavJ%2BMFTwWmLFM6HulIoffPCAm9eAtmeR8vFlp5Q2PjCqUexQ1O0VFw8STR8rsFHDvLIAiZw4uWPYSqy6E1xksrbfUCpNLQqAZv%2FYX4hRE%2Fwy7lCGFn2E5E%2FLjHg7%2FJBBbKDfbix77f8NvcdZa9SLsqnv0na3yOFzAhTumgL6fo66BeJXtJSoHFDubJlTr38JoZ36vUKwa5QLHpgDFcsL%2BPKnjE7blDgaJ%2FLCQwDz2v1WEg7F05abNKtBM4LOYEEf7XB9nOwTzlUkAFlXVdBFtoXZTUabyrrJJ3SsdtDsUwToeuSIBow0xWZw7hCjGFPEbVaS9BFFe%2BgKh%2BSIeJWOm0yUqyOTNZl2BxguyoCsV9l%2B0sKSNBLiYM0sLJeHbEC%2FFVTKlKSWDy3pcj9PVi9Zey%2FHiEgJdpo1ySalHyfUx6ZPPDTFiDCHLQxkqRyDjHlASEByw%2B39U4XL2AEMKjkBkk9OSUFsowKHD1gU%3D

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  5. with you on all the usskies are money laundering crims thing but milner is def not. he's a serious silicon valley player with a long track record of early stage investments.

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  6. Rob have you seen the recent email from vita mojo to its investors? I thought it made interesting reading.

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    Replies
    1. No I havent. You can send it to my email rob@ecfsolutions.co.uk - Tks

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