Putin Effect

Russia's Struggling Start-Ups

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Uncertainty is the biggest enemy of many start-ups.
  • Why it matters

    Why it matters

    Lamoda, a Russian venture of German firm Rocket Internet, could actually benefit from Russia’s economic crisis, and help boost Rocket’s earnings.

  • Facts

    Facts

    • The European Union and the United States imposed economic sanctions on Russia last year over the Crimea’s annexation.
    • The value of the ruble has plummeted versus the U.S. dollar and euro and as much as $148 billion has left Russia.
    • Russian start-ups received 20 percent less venture capital last year than the year before, industry analysts say.
  • Audio

    Audio

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Alexander Naslednikov’s only interest in international politics is how it affects his Moscow-based business. He works almost around the clock for his start-up, Gbooking, which is used by service providers such as hairdressers as an online booking service.

The 34-year old, who was born in the Soviet region now known as the country of Belarus, moved his business from Haifa to Russia’s capital in February 2014. That was a strategic decision at the time, he said.

A few weeks later, Russia’s president Vladimir Putin also made a strategic decision, when he sent his troops into the Ukrainian peninsula of the Crimea, annexing the territory.

Since then, the value of the ruble has fallen dramatically against the dollar and euro and investors are estimated to have shifted as much €130 billion, or $148 billion, out of Russia.

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