Alexander Galitsky is a world-famous scientist and IT developer. In the late 1980s, he worked in the space technology field and then built a successful business by launching several startups in Europe. For the past 14 years, the entrepreneur has been managing the Almaz Capital VC firm. The organization invests in companies that develop tech products for the B2B market. Today, the fund’s portfolio includes over twenty IT startups that are successfully entering global markets.
Alexander Galitsky’s early years and his first steps in science
Alexander Galitsky was born in 1955 in the village of Zarechany, Zhitomir region of the Ukrainian SSR. His father was in charge of a state farm and his mother was a school teacher. During his school days, Alexander was equally good at the exact sciences and humanities. He wrote stories and planned to become a journalist, while at the same time, he liked to assemble radio equipment and built electric guitars together with his friends. His father was skeptical about him working in the media and encouraged his son’s interest in the exact sciences.
A gold honor graduate medal and an impressive high school certificate were Galitsky’s ticket to the best universities in the country. Alexander passed the exams and entered MIET in Zelenograd. During his student years, he got an internship at the Microdevice Research Institute – a division of the ELAS association and one of the country’s leading tech enterprises – and by his fourth year he had decided that he would continue working in this organization. After getting his degree, he started working on developing satellite remote sensing software, and eight years later, he was appointed head of the design department. Later on, Galitsky successfully defended his thesis and received a PhD degree.
Creating a business in IT
With the beginning of perestroika, Soviet-American relations started to improve. In 1990, representatives of US-based Sun Microsystems paid a visit to ELAS. The businessmen from the United States were impressed by Galitsky’s inter-satellite data exchange system and the very small high-performance circuit board he created. The inventor was invited to pay the Sun Microsystems office a return visit. He was able to go to the US a year later. Alexander Galitsky came to the seminars in Washington and visited Silicon Valley, which hosted startups from around the world.
Galitsky returned from the United States confident that, with some investment from the state and with the help of foreign investors, Soviet tech companies would be able to succeed in California. But the idea fell through. So, the entrepreneur set his mind on developing his own company, called ELVIS+, which received an investment from Sun Microsystems. Galitsky’s company launched the first Russian fax gateway and developed a prototype of Wi-Fi and a VPN solution for Windows.
By 1998, Alexander Galitsky’s name was already well-known to the global IT community, and he was considered an authority in the field. The entrepreneur switched his attention to a business endeavor in the Netherlands; first he founded a cybersecurity company called TrustWorks and then launched EzWim, a startup that developed B2B SaaS solutions for communication cost optimization.
Almaz Capital venture fund
It was Cisco Corporation – which had plans to enter emerging markets – that proposed the idea of creating the fund. The company was willing to invest a lot of money in the tech industry. Its representatives met with Galitsky during the European Tech Tour 2004 and proposed to create a VC fund that would support tech startups in Russia and the CIS countries. Four years later, Almaz Capital started its operation.
The fund received more than $30 million from Cisco and $20 million from UFG. A year later, it welcomed a $20 million contribution from the EBRD. Almaz Capital I focused on discovering promising projects in Russia and the CIS, and Alexander Galitsky became its managing partner.
In 2013, Almaz Capital II was founded; the fund’s LPs (Cisco, EBRD, IFC) invested $174 million in the project. A year later, the geopolitical situation changed. This was the reason why the fund chose to no longer invest in Russian companies. The vector of Almaz Capital’s interests shifted towards Central and Eastern Europe and the CIS countries. Alexander Galitsky believes that there are many promising startups in these regions that find it difficult to make headway due to the limited size of the local markets. Almaz Capital III, with $191 million in assets under management, was created in 2021.
Today, the fund’s portfolio of more than twenty companies includes Acronis, GoodData, Gridgain, Hover, DMarket, Minut, Mobalytics, Neptune, OneSoil, Parallels, Refurbed, and Virtuozzo. The fund helps startups achieve success primarily in the US market that shows a very strong interest in the B2B technologies. Today, its priority areas are artificial intelligence, machine learning, cybersecurity and data processing. Some of the fund’s most successful exits include Yandex, Qik, Sensity, Acumatica, and Xometry.
Galitsky’s departure from Russian projects
The venture capitalist has repeatedly stressed in his interviews that the fund follows the bridge model and has no interest in local projects. Alexander Galitsky believes that the key to success for any technology company is to have a capital and access to global markets with a high demand for innovations. The entrepreneur left all Russian organizations in which he was involved, as they operated exclusively within the country.
Alexander Galitsky left the Board of Directors at the Skolkovo Foundation and Skolkovo Ventures; he stepped down from the Skoltech Board of Trustees, the RVC Advisory Board and the Venture Market Council. The investor is no longer a member of the expert council for the development of the information technology industry under the Russian Ministry of Digital Development, Communications and Mass Media. He also resigned from his positions at Alfa-Bank and Megafon. As for the Moscow State University business incubator, the project did not last long. Alexander Galitsky took part in one Supervisory Board meeting, but no other meetings were ever held again.