Global Economics

A Russian Tech Pioneer Sets the Pace


You may not have heard of serial entrepreneur Serguei Beloussov, founder of SWsoft, but Western investors go ga-ga over his startups

Like other Russians growing up under Communist rule in the city then known as Leningrad, Serguei Beloussov was taught, he says, that "being involved in business is something really bad." So he set his sights on becoming a neurosurgeon and later switched to scientific research—a career that his parents, both physicists, encouraged him to pursue.

Not long after enrolling in Moscow's Institute of Physics & Technology, though, Beloussov found that he had a knack for balance sheets. That proved to be a fortuitous discovery: Today, the 35-year-old Russian and his business partner, college buddy Ilya Zubarev, are both multimillionaires.

Perhaps Russia's most prominent serial entrepreneurs, the two have launched a dozen technology companies including Rolsen Electronics, the country's largest consumer-electronics maker, and two new software firms that industry watchers say could go public on Western stock exchanges within the next few months at valuations up to $1 billion each. (The firms declined to comment on potential initial public offerings.)

In Good Company

That success lands Beloussov squarely in the rarefied company of Russians who have launched globally successful tech companies. Others include Alexey Pajitnov, the inventor of computer game Tetris; Stepan Pachikov, founder of software maker ParaGraph; Maxim Levchin, who developed PayPal (EBAY), and Greg Shenkman and Alex Milosavsky, who launched call-center software giant Genesys (ALU).

Investors and fans seem especially high on Beloussov. "He is an absolute genius," says Jeremy Levine, a New York-based partner at venture-capital firm Bessemer Venture Partners, which has invested in a Beloussov startup called SWsoft. "We have about 100 venture-backed companies in our portfolio and see lots of entrepreneurs, but he is off the charts."

Indeed, SWsoft appears to have especially good prospects. It makes a variety of software, including tools that help companies better manage Web sites, storage, and servers, as well as a product that lets people run Microsoft (MSFT) Windows programs on Apple (AAPL) Macs. The latter, called Parallels, is a top-seller on Amazon.com (AMZN) and has helped SWsoft establish a consumer beachhead in the U.S.

Singapore Residence and Bermuda Incorporation

Incorporated in Bermuda, the company employs more than 725 people scattered throughout global sales and marketing operations and research and development centers in Moscow and Novosibirsk. Beloussov, who now lives in Singapore, is the chairman and chief executive officer. He has managed to raise $12.5 million in funding from three U.S. venture firms, Bessemer, Intel Capital (INTC), and Insight Venture Partners, and claims to have 10,000 customers, including a growing number of top U.S. corporations. Among SWsoft's major rivals is Palo Alto (Calif.)-based VMware (EMC).

Beloussov also serves as chairman of a spin-off called Acronis, which offers software tools for data recovery. Also Bermuda-based, but run by an American CEO named Walter Scott in Burlington, Mass., Acronis has raised $11 million in funding from Insight Venture Partners and claims to be grabbing market share from Symantec (SYMC).

The fact that these companies could go public in the West and command significant valuations is a sign of how far the Russian tech sector has come in recent years. Peter Kuper, a technology analyst at Morgan Stanley (MS) in New York, argues that there's a larger trend at work, namely, that Russia's highly educated population of mathematicians and scientists finally is starting to commercialize and export great technology at a lower cost than competitors.

Global Boards and Customers

At the same time, the firms typify a globalizing trend among Russian tech outfits—some of which, like Acronis, even have American CEOs. Indeed, Beloussov insists that both SWsoft and Acronis aren't really even Russian. After all, their boards are made up mostly of non-Russian members and they were financed with Western capital. Plus, nearly all their customers and partners are outside Russia.

Keeping up with a global clientele takes its toll, though. "I have not stayed in any one place for more than two weeks in the last five years," Beloussov says.

Still, he's not slowing down. Though mum on details, Beloussov is already reinvesting some of his wealth in new startups. "In the next one to five years, you are likely to see a larger number of tech companies coming out of Russia," he promises. And you can bet, at least a few of them will be Beloussov-born.

Schenker is a BusinessWeek correspondent in Paris.

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