May 26, 2022

Roman Abramovich, a Russian oligarch who owns highly successful Premier League football club Chelsea, this week pledged his club’s assets for an unprovoked invasion of Russia as part of UK government-imposed Russian sanctions against him and others confiscated. However, their relationship with technology so far has been: Not Touch. TruFone, which said it has raised more than $200 million from two funds that each consider Abramovich to be their main financial contributor and effectively consider the two funds to be majority shareholders, said the ban does not currently affect his company. , and also does not own his share, because his connection with the company is “indirect”.

“We are aware that on March 10, the UK government imposed sanctions on Roman Abramovich, who is indirectly related to Trufone,” Trufone Limited General Counsel Rachel Chapman said in a statement to gaming-updates. “However, Mr Abramovich has no relevant ‘interest’ under UK sanctions law in Trufone. This means TruFone’s business can continue as normal. It should be emphasized that Truphone is not subject to restrictions. We are taking legal advice and are constantly monitoring the situation.”

The fact that the startup’s two largest shareholders are actually investment vehicles for Abramovich, but are at arm’s length from Abramovich himself, shows how difficult it is to keep track of funding in the tech world; And especially the difficulty of distinguishing between “direct” and “indirect” investments and, therefore, what is formally and informally affected by sanctions.

Abramovich has made a series of investments in TruFone, a communications technology company developing eSIM and other technologies that provide global connectivity for voice and data that bypasses traditional networks, funded by his multi-year investment vehicles.

In 2013, his company Minden led the £75m round, taking that to £70m. In 2018, he received £54m (£18m up front with the remainder to be made available later on a “conditional basis”) through two of Abramovich’s companies, Minden and Volyn Holdings. This was followed by £30m again in 2020 from Wolin and Minden.

According to PitchBook, Wallin owns 72.45% of TruFone and 22.77% of Minden, and has no other active investments in any of the companies in the database. The company’s last price in 2020 was $516 million.

(Note: When we covered this investment, TruFone tried to keep the details of the investment firms less public: I remember mild panic calls from PR people asking me not to mention them in articles and then trying to cut their involvement. Absolutely.)

Abramovich announced last week that Chelsea would be put up for sale due to the situation and would donate aid to Ukraine. The government halted the process yesterday to ensure that Abramovich cannot profit from the holding company in the meantime. It will continue to operate under a limited license in the absence of new ticket sales (only season ticket holders who have already paid for tickets can participate), merchandise sales, and player transfers or sales.

It is worth seeing what else could happen to Abramovich’s technology interests, and how exactly, and if the government decides to proceed with the described indirect investment.

Abramovich also has assets outside the UK. Aside from Minden and Wolin, who currently list TruFone as their only active investment in PitchBook, Abramovich is linked to two other venture capital firms: Norma, based in the British Virgin Islands; and Impulse VK. Impulse is based in Moscow and has made 61 investments in total (some multiple rounds for the same startup, some left). Norma has invested 13 funds including the launch of Storedot batteries, OpenWeb (formerly Spot.IM) and BrainQ Technologies.

Abramovich was named as one of several Russian investors in Telegram’s failed ICO a few years ago. Although I contacted Pavel Durov from Telegram to ask if he is now an investor and I confirmed that he is not.

“No, fortunately none of them are our investors,” he told me in a Telegram message.

I heard that one person estimates that about 45% Everything Venture capital in Europe goes back to Russian sources – a figure that includes not only the wealth of the so-called “oligarchs” who became rich after the fall of the “Iron Curtain”, or (as some argue) rebuilding a country with people in a loose Soviet infrastructure – to hell with it; But the many billions generated from these assets over the years, subsequent dividends from other companies and, of course, Russian businessmen over the years have made money in more traditional ways.

Several investors such as Index Ventures and EQT have come out with statements in recent days about their relationship with Russia and Russian money. Be wary of claims that the money is from Russia or L.P. Russian origin. Doesn’t come out “directly”. This raises the question of what role the “indirect” can play. At the same time, they refrain from investing in Russian startups and urge portfolio companies with Russian activities to close them as well.

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