Russian start-ups skating on thin ice in the West
Immigram, a U.K. project with Russian roots, won a competition for start-ups at the prominent Slush conference in Helsinki earlier this month. However, within a few days, the company opted out of the award and the organizers withdrew the €1 million prize. This happened because of criticism on social media: Slush was accused of rewarding a Russian project. Immigram’s story made a lot of noise but, as The Bell discovered, it’s not unique.
How Immigram was “canceled”
Immigram, a start-up created by Russians Anastasia Mirolyubova and Mikhail Sharonov, won Slush’s start-up competition on Nov. 18. Immigram helps IT professionals from around the world to apply for a U.K. Global Talent Visa and Slush is an annual conference in Helsinki which is seen as a landmark event for Europe’s venture capital market. The prize for the competition winner would have been investment worth €1 million.
No sooner was the decision announced then Slush faced fierce criticism on social media for choosing a Russian — given the ongoing Ukraine war. And Immigram itself was criticized for helping Russian specialists leave the country despite Western sanctions. There was a further accusation that, although Immigram claims to have left Russia, it continues to advertise job vacancies in Moscow. In addition, one of Immigram’s investors, Sergei Dashkov from Joint Journey Ventures, lists his location as “Moscow” on LinkedIn.
Both the start-up and its investors made their excuses. However, the day after the award, Slush announced it was investigating. Two days later, it annulled the award. Shortly before that decision, Immigram co-founder Mirolyubova wrote that her company had chosen to back out. In a commentary for Forbes, the entrepreneur slammed the conference organizers, accusing them of discrimination, racism and betraying their stated values.
A bigger problem
The Immigram affair received so much attention because it happened at a major conference. However, it is far from the only situation of this type in the past year.
In summer, The Bell wrote about the problems facing start-ups with Russian founders in the U.S. state of Delaware, one of the most popular jurisdictions for registering companies. In particular, local regulators were refusing to work with Russian immigrants.
The Bell spoke to several Russian start-ups whose founders have, since the invasion, stopped working in Russia and evacuated their teams from the country. According to one venture investor who spoke to The Bell, cutting all ties with Russia is the only path open to companies that wish to build their business or raise investments in the U.S. and Europe. You can no longer try to keep a foot in both camps.
In itself, a Russian passport is not a red flag. However, to work normally in Europe, neither start-ups nor their investors can afford to maintain operations in Russia. That means no staff and no investors.
One of The Bell’s sources warned that companies have to be rigorous about this. For example, the mere presence of vacancies tagged to “Russia” or “Moscow” on LinkedIn will immediately cause problems when a start-up is vetted, he said. This is exactly what happened to Immigram. It is also important to make a public statement about the company’s position on the war, the source added.
Why the world should care
All Russian investors and entrepreneurs now have to take a side. And some have publicly cut all ties with Russia. For example, Nikolai Storonsky, founder of Revolut, and investor Yury Milner both renounced their Russian citizenship. And, earlier this year, Telegram founder Pavel Durov asked that he no longer be referred to as a Russian citizen.