The Russian Exit: Why Yuri Milner Walked Away From Mail.ru
The (Russian Billionaire) Investor
With an advanced degree in theoretical physics from Moscow State University (1985), and an MBA from Wharton Business School (1992), Yuri Milner started investing in Internet companies in 1999. His two babies, Mail.re Group and Digital Sky Technologies (DST) Global have turned this Moscow-born investor into a very, very rich man.
Yuri stepped down as Chairman of Mail.re in March, handing over the position to the co-founder and CEO Dmitry Grishin. It seems his sights are set on a much more global venture.
Yuri launched DST Global in the mid-2009 as the primary vehicle for international Internet investments. Under his leadership, the company has invested in Facebook, Twitter, Zynga (a leading social gaming company) and in Groupon, a leading social e-commerce company. DST Global is currently Yuri’s golden child, with a rumored 9-figure investment endeavor.
The $1 Billion Plan
Yuri is a very savvy, very successful businessman, this much is clear. So, when Bloomberg announced DST’s call for investors on a $1 billion fund for a new tech investment, people have taken a keen interest. First question on everyone’s mind…
How is Yuri going to pull it off?
According to Bloomberg News:
“DST has committed Facebook stock valued at $50 million to the fund, meaning limited partners get a chance to own the shares through their investment. Early investors were offered the Facebook holding at a 12 percent discount to an internal valuation of about $74 billion, as well as a 25 percent reduction in the fund’s management fee.”
Investing in the fund in return for Facebook shares? Sounds like a deal to me. So, once DST has raised the funding, the bigger question is…
Where will the $1 billion be invested?
This is where the rumor mill is turning. Yuri regularly uses the “priming the IPO pump” tactic, that is to say, making minor investments in late-stage startups that are valued at $500 million or more (think DST’s LinkedIn and Groupon investments before they went public).
DST’s previous investments (Twitter, Facebook, Airbnb etc.) suggest it will likely be in companies with consumer-facing services that have a strong level of media attention.
Only time will tell how the fund will be distributed.
Some business analysts have criticized Yuri for “abandoning” his first born, Mail.ru, too soon, but one thing is for sure: He’s a man with the billion dollar plan which suggests he knows exactly what he’s doing.