Belarus Is Ready to Begin With Venture Capital Investments

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Angel Investors in Belarus
Fact Box

Yuri Gurski - serial entrepreneur with 4 exits: Viaden Mobile,, and MSQRD and a mentot of Belarusian start-ups.

Yuri Zisser - the founder of TUT.BY and One of the first angel investors in the region. Area of start-up interests: travel, healthcare, e-commerce. His recent investment is Blinger, a tool integrating popular messengers with corporate helpdesks.

Recent exits of Belarusian entrepreneurs: Apalon (mobile App company was acquired by IAC), (open source offline maps acquired by, MSQRD (face masks App acquired by Facebook).

More than 3,500 young Belarusians graduate every year, from 14 state universities, with majors in Computer Science and other IT-related disciplines.

Alexander Chekan

About Alexander Chekan

Alexander Chekan is the CEO of the largest Belarusian online media outlets — TUT.BY — and a mentor of a number of Belarusian start-ups. Alexander conducts regular mentor sessions for start-ups and he is the host of an online business conference in Minsk. He has an EMBA degree.

Although there is a lot of tech talent in Belarus and the start-up ecosystem is blossoming, when it comes to venture firms and angels’ groups there is a huge gap between talents and available funds.

There are some good reasons for this. There are 1,000 IT companies in Belarus but only some 10-15 per cent of them are successful with their own products. Mostly they are service businesses: This model seems to be safer and more sustainable but it has limited growth potential. Service businesses such as EPAM usually have their salesforce and marketing teams where the customer is — that is, in the US, Europe or Asia. As a result, there are not enough skilled business professionals here in marketing, sales and business development domains who can develop own products.

So there it is a vicious circle: there are few business people, which is why there few product companies and there are few product companies that can produce business alumni. 

However we can actually see an evolutionary spiral and every year more and more developers are creating their own start-ups and learning how to build businesses. There are people from World of Tanks creating data tools, guys from Viber working on social ecommerce projects, EPAM alumni developing the next Jira killer and so on.

Now we see hackathons every week and investors are coming to Belarus in quest of the new MSQRD. But still there is no venture fund in Belarus because Venture Capital (VC) needs a pipeline of investment-ready projects to choose from. If a VC does even two deals a year, it means they will be looking through hundreds of projects with good potential and many of them are already funded by angels. 

Angel investments in IT must be made with smart money. Where does smart IT money comes from? Naturally there are two sources: the savings of the top managers of IT companies and the exits of IT entrepreneurs. Moreover, angels usually invest in risky ventures at around 10 per cent of their net worth or annual income, so we can divide the potential capital ten-fold. Even the extremely successful IT entrepreneurs in Belarus are young enough to concentrate on their own “next big thing”; they’re just not allowing themselves to pay attention to anything else. 

These circumstances lead to a handful of active angels who are mostly working, hands-on, on their portfolio projects.

If we compare Belarus with neighbouring countries such as Lithuania, Poland and Russia, we can see a huge infusion of governmental / EU free money in VCs. It looks like the time 50 years ago when governments were giving away money for health-care to keep people alive: Thirty years ago they cared a lot about education, wanting people to find jobs for themselves and nowadays they are supporting entrepreneurship in order to encourage people to create those jobs. However, in Belarus the government still supports the state-owned heavy machinery plants, despite the fact that the IT industry requires much lower investments in infrastructure. The good news is the Hi Tech Park launched business incubator — free office and co-working space for start-ups — but it is still not enough.

The community of angel investors is growing, both quantitatively and qualitatively. There are some informal meetings and Facebook groups, as well as mentor sessions at the Hi-Tech Park incubator and other co-working spaces. This June, a group of investors from Belarus went to the US to learn from the American colleagues. The three-week programme was devoted to all aspects of the venture ecosystem.

Naturally foreign VCs and strategic investors are already hunting for start-ups from Belarus. The first visits began more than five years ago and now a new investment manager lands in Minsk every week, to explore the market. Just a few funds are risky enough to jump into a seed-stage start-up from abroad, but when it is big enough to raise millions, it can raise them from all over the world, and usually the company is already incorporated in the US, the UK or Cyprus at that moment.

As for the local VC/AI community, it is evolving and although there are no formal structures yet, online groups and private meetups exist. At the moment the best way for a foreign VC is to cooperate with local community leaders and/or co-invest with them is to have hands-on control.


The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.


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