David Waroquier:

Our network is becoming bigger everyday

“To understand the country you need, as I say, to push the door”, said David Waroquier, one of the partners at Mangrove Capital Partners, in an exclusive interview in Luxembourg with the editor-in-chief of Capital Ideas.

Mr. Waroquier, a few years ago you decided to enter the Russian market. Why did you make this decision?

Yes, it was ten years ago, to be exact.At that time we had plans to develop our Internet business in foreign countries. While many Venture Capital firms started looking at China, India, or Brazil… we decided to turn our sights to Russia. It was much closer to us,and similar to Europe in terms of culture. Andso we decided to move there and to have a look what Russian Internet market was like. I was the first to go to Moscow.

This was your first time in Moscow?

Yes, it was not only my first time in Moscow, but also the first time I got to interact with Russian people. I came to Moscow without any understanding of the place and the market.

You’re kidding!

No, I really knew nobody and I really knew nothing! But I had to take the first steps as quickly as possible because we wanted to do a first investment.

Did you have any fears or doubts about your endeavor?

No, not at all. We quickly made our first investments together with a successful Russian business angel, ABRT. By the way,they are doing pretty well in St. Petersburg now. Soon, we came to the conclusion that our Russian colleagues have the same perceptions of the Internet market. The only difference between us was that they knew their market better than we did. So we decided: “Let’s combine our efforts, let’s help each other.” That’s how we’ve started a fruitful collaboration of many years. I would like to mention that the Russian Internet market back then was in the initial stages of development, and this was great. Russian entrepreneurs came up with a lot of very interesting ideas that we could bring to life together. Unfortunately, they were not good at marketing. We’ve had to help them figure out how to sell themselves and how to sell their products. This is a time when I decided to be more involved in giving lectures in different universities, at technoparks, at technopolicies and other places like that. Just at that time I got acquainted with the guys from Moscow City.In one word, that’s how we’ve made a network of useful contacts in Moscow and in Russia. Since then, it has grown bigger and bigger everyday.

Could you tell us about the fund you decided to establish with the Moscow City Government three years ago?

Three years ago, through our friends, we found out that the Moscow City Government wanted to launch a venture business.The issue was trying to figure out who would manage the fund. So they came to us and asked for help. I said:“Yes, of course.”At that time, we were interested in creating something like that to further develop the Russian Internet business and Mangrove’s presence in Russia. We wanted to focus on Russian startups. And we began discussing the project. Unfortunately, everything was put on hold two years ago due to the sanctions. But we never abandoned the idea. We’re sure that sooner or later the situation will change for better. We’re still here and we’re still interested in startups in Russia. I can tell you also that today many Russian startups are eager to develop internationally. They’re showing a lot of ambition.It’s really nice and we can help them to go global.So it’s time we bring back these discussions with the Moscow City Government.

Do you believe that Western sanctions will be lifted soon?

I hope so. I believe that the sanctions can’t help anything and both partiesare losing. We should negotiate and figure out how we can move forward. We don’t sit and wait. But I don’t know when the sanctions will be lifted. Nobody knows, of course.

What do you consider your greatest achievement?

KupiVip.ru is our flagship. It’s very profitable. They sell their goods everywhere in Russia, as well as in Kazakhstan and Belarus. They also have an office in Berlin where they buy goods from European brands.I’m happy that KupiVip.ru is an inspiration for many Russian young entrepreneurs. They say: “Look, that’s possible! Why not try to do something like that.” At KupiVip.ru we’ve employed five thousand people and many of them have become entrepreneurs themselves. And that’s brilliant.

What about other companies?

Homeme, an online furniture store for Russian market, is a very successful business. Oktogo.ru, Russian’s premier hotel booking and travel website, is doing well also, though they suffer more from the difficult economic situation in Russia.The new company Paymo, which is a mobile payment solution targeting the retail utility markets, is also doing well.

How much money have you already invested in Russia?

We’ve deployed a total of $30 million in Russia and we’ve attracted another $150 million.

And how many jobs have you created?

I would say that, over ten years,we created about6,000 jobs.

Let me change the subject. I know that your wife is Russian, she’s from Moscow. Maybe this question is senseless, but let me ask you: is the Russian soul really mysterious?

No. But to understand that one needs, as I say, to push the door open. Most people don’t understand what Russia is. Ten years ago I knew very little about it as well – just images ofthe Red Square and stuff like that. But when you push the door open you see very welcoming people and a beautiful country. So you see a completely different world than what is usually depicted in the mass media. If you visit Russia, your perception of it will change completely.

That’s what happened with you?

Yes, of course! (Smiles)



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