Alexander Galitsky, managing partner at Almaz Capital, and his colleagues helped dozens of IT startups achieve success. The venture capitalist’s area of interest includes projects aimed at creating AI/ML, blockchain, IoT, and edge computing products for the B2B space. Today, the VC firm focuses on startups from Eastern and Central Europe and CIS, where young and promising companies do not have the opportunity to reach their full potential due to the narrow market. Almaz Capital manages multi-million dollar assets that are rationally distributed by the firm’s team, which makes it one of the most established players in the venture capital market. How did Alexander Galitsky, a scientist and developer of breakthrough technologies, manage to achieve such impressive results?
Alexander Galitsky – from space to venture capital
The biography of Alexander Galitsky could have been different had he fulfilled his youthful dream and chosen a career as a journalist. It was his father who helped him make a fateful decision; he correctly assessed his son’s potential and persuaded him to shift his interest towards the exact sciences. After school, Alexander Galitsky entered the Moscow Institute of Electronic Technology in Zelenograd, and during his student days, he interned at the Microdevice Research Institute at the ELAS association, which developed special-purpose space communication systems.
After defending his thesis, Galitsky continued to work at the research institute, and by the age of 32, he was the head of a design department in the association. A turning point in the young scientist’s career occurred in 1990, when a delegation from Sun Microsystems visited the enterprise. Galitsky showed American businessmen a satellite data exchange and transmission model and an amazingly small high-performance circuit board.
After a trip to Silicon Valley in 1991, Alexander Galitsky came up with the idea to launch Soviet startups in California with minimal funding from the state, and then raise capital for them from international investors. The project caught the interest of the government, but in the end, the initiative failed. So Alexander Galitsky focused on his own business; Sun Microsystems actively supported his ELVIS+ company, which, among other things, made its mark by developing the first prototype of Wi-Fi and VPN products.
In subsequent years, the businessman founded several successful startups in Europe; he developed cybersecurity solutions and built software that managed corporate telecommunication expenses. In 2004, the entrepreneur was invited to lead the European Tech Tour in Russia, where international investors had a chance to discover promising startups. During the business meetings, Galitsky was approached by people from Cisco Systems with a proposal to establish a venture capital firm. The company was interested in promoting its services in emerging markets and wished to invest in building and developing innovation activities in Russia and the CIS countries.
Almaz Capital – key milestones
Almaz Capital I was launched in 2008, with Alexander Vladimirovich Galitsky as its managing partner. The anchor investor of the VC fund was Cisco, then it was joined by UFG, and a year later, they welcomed the EBRD as a limited partner. Almaz Capital I was a $72 million fund, and back then, it targeted projects in Russia and the CIS. Alexander Galitsky considers investments in Yandex and the Qik video messaging service to be the most successful ventures of this period. Shares of the Russian search engine climbed up after the IPO, and Qik was later acquired by Skype. The fund made significant profits on the “exits.”
Almaz Capital II, with an increased investment of $174 million, was established in 2013. A year later, the VC firm hit another milestone – at the request of institutional investors, the fund stopped investing in Russian companies and shifted its attention towards Eastern and Central Europe and the CIS countries. As Alexander Galitsky himself notes, the bridge model of the fund was created with introducing startups to global markets in mind; and restrictions caused by the complicated geopolitical situation made it difficult to implement this model.
Almaz Capital III, valued at $191 million, was launched in 2021. Its LPs are the EBRD and the European Investment Fund.
Today, Almaz Capital’s portfolio includes more than two dozen businesses, including successful companies such as 3DLook, Acronis, Mobalytics, GoodData, Gridgain, Minut, Neptune, Parallels, DMarket, and Hover. The firm is headquartered in California and has representative offices in Berlin, London, Warsaw and other cities.
Businessman’s withdrawal from Russian projects
Alexander Galitsky believes that a good tech idea can be born in any country in the world, but it’s the access to the global market that is crucial to the success of a startup. This is the reason why the businessman withdrew from all Russian projects and no longer works with Skolkovo, RVC, Alfa-Bank, the Russian Quantum Center, and Megafon. He ended his collaboration with the Moscow State University Business Incubator (the project that lasted for only one meeting), SkolTech and Skolkovo Venture Investments; he also no longer holds the position of an expert on the council under the Ministry of Digital Development.
Today, the investor considers young companies that offer innovative products to be the most promising. The fund helps startups gain ground in the United States, where enterprises focus on innovations and are ready to invest in technology.