The market for used mobile phones is huge and largely undeveloped, with a gleam in his eyes say the founders of the project SmartPrice Alexander Chernyak and Artem Bolshakov. In 2018, Russia had sold nearly 30 million new smartphones and change them, our compatriots, according to Chernyak and Bolshakova, quite often — on average once every 20 months. The old phones can be sold only from hands on Bulletin boards or to hand over a pittance to the Commission. In the end, millions of machines just gathering dust at home from their owners. Chernyak and Bolshakov figured out how to bring a promising market for used equipment in a transparent box.
From left to right: Dmitry Rudenko (co-founder and development Director), Alexander Chernyak, Artem Bolshakov, Vladyslav Ovchynnikov (co-founder and CEO)
SmartPrice is not the first business project Chernyak and Bolshakov. In 2014, they graduated from American universities became co-founders of the service for the sale of used cars CarPrice. Now Chernyak 25 years, and says its — 28, and they plan a new revolution — this time in the market of used phones.
“We are both from ordinary families,” she shares Alexander Chernyak. His father, Eugene Chernyak, founder of alcoholic holding Global Spirits, which produces, in particular, vodka “Khortytsya”. The state of the Chernyak-senior Ukrainian magazine “Focus” in 2019 is estimated at $124 million Artem Bolshakov detail about the parents doesn’t want to say: “the Main family business — mining”. He is the commercial Director of the Magadan JSC “Gold mining company “Pavlik” (revenue in 2015 — 2.5 billion rubles, more recent data not published). Your project mentions investment company “Arlan”, whose President, the newspaper “Kommersant” called Arcadia Stockholm — presumably the father Artem. According to SPARK, he is also the main shareholder of the agricultural company “Zolotaya Niva” in Smolensk region (revenue in 2017 — more than 426 million rubles).
Parental support played in the history of entrepreneurs an important role, but it’s not about financial aid, they claim. Alexander school years attended meetings and talks in the company of his father, and summer holidays spent not “like normal kids” and the internship in the financial and IT departments of his father’s holding, in the intervals laid bricks on the construction site to earn pocket money. “My father was such a policy — all the money I wanted to spend, I had to earn on his own”, — confessed Chernyak. At age 15, he launched the first private enterprises: football field and tennis courts that were rented out and received a small profit.
After finishing school in the Ukrainian Zaporozhye Alexander decided to go to Northeastern University in Boston. Money for training is about $160 000 in four years — took father. “It was my first and last interest-free loan in my life,” laughs the entrepreneur.
In Boston Cherniak studied business, and the evenings spent at the gym: “There’s nothing else to do — just learn and rock out”. In the hall he met future business partner Artem Bolshakov, who also studied in Boston and was also engaged in weightlifting. “I have long thought it was Hispanic of some sort, but one day I heard him talking on the phone in Russian and decided to meet,” recalls Alexander.
Artyom credits the parents did not take, but the typical life of a “Golden child” to live, too, failed. “I seriously was engaged karate, played for the Junior national team and played the piano. Time to ride in a limo sticking out of the window with a bottle of champagne, was not“ — he says. After school Bolshakov enrolled in the Finance Academy under the government of Russia, during her studies, she interned in consulting at Ernst & Young (“rises at 6 am, 65 hours a week for a salary of 30 000 rubles — it’s all real”), and last year he founded his own corporate travel Agency. “Some of my friends were children of wealthy parents, who like the first officials of the companies had booked travel for myself and staff. We have become such a boutique Agency for its” — says Bolshakov. After graduation from the Academy Artyom continued his studies at Boston’s Brandeis University, developing the Agency from overseas. But soon quarreled with partner and closed the company.
A car with a hammer
In addition to love for bodybuilding Bolshakova and Chernyak linked the desire to establish a global business. But anything worthwhile is to invent a time — Bolshakov graduated and returned to Moscow.
Came back with the idea. In the US, he interned at an American automobile auction company Manheim, where he successfully launched the project on insurance futures for cars. By happy coincidence, Bolshakov came to the Vice-President of Manheim and convinced him to open a business in Russia. “It was incredible luck: I’m student from Russia, sitting in the office of a top Manager of a huge Corporation. And he not only listened, but agreed to cooperate!” — remembers Artem.
Full of enthusiasm, Bolshakov arrived in Moscow and went to an experienced friend of his, Oscar Hartmann, one of the pioneers of the Russian Internet Commerce, founder of discounter clothing KupiVIP. “I knew Oscar already for ten years, our parents were friends a long time and often told me — go to the Oscar talk”. He appreciated the idea, and partners (together with Eduard Gurinovich — another familiar Hartmann) decided to open a branch of Manheim in Russia.
But plans went awry: in the spring of 2014, many American companies have reduced their presence in the country due to sanctions, and Manheim was no exception. “People from the other side, just gone — he said that company policy has changed, but we all understand”, — says Artem.
The business model still looked good partners, and they decided to do the equivalent of the American auction in Russia. So, the market appeared CarPrice. The service had planned to automate the used car market volume of $60 billion a year, offering owners an easy way to sell your car. Vehicle details are uploaded to an online platform, where dealers from across the country traded for him in real time. The winner is the one who offered a large sum. If the owner agrees, he sells the car and gets the money in the office What. The service earns a Commission from dealers — from 2% to 10% of the transaction.
Inspired by Bolshakov constantly told Chernyak who has completed training in the USA, how are things going in a startup. Alexander, who had by that time to work in consulting, KPMG and the private Bank of Harriman Brothers, received a diploma and also joined the team CarPrice.
Dealers on the idea to digitize the sale of used cars reacted first with skepticism, but soon gave up under the pressure of progress. For the first six months to What was joined by 700 dealers, after the service has been sold more than 1000 cars.
At first Bolshakov and Chernyak was fully immersed in the operational management: Alexander was involved in all processes related to the purchase of cars, Bolshakov — selling. For five years of What had to go offline, opening 60 company-owned branches and 55 franchise in 30 cities, the amount of attracted investment into the project exceeded $50 million In October 2018 CarPrice first appeared at plus — 17.7 million rubles of profit for the month on sales of 1.4 billion rubles. Since then, the profit of the service remains stable, say the founders, but exact figures are not disclosed.
By the summer of 2017 in What there was a team of salaried managers, the need “to move manually every day” has disappeared. Bolshakov and Chernyak went to the Board of Directors and thought about a new business project.
In the process of searching I stumbled on the Chinese company Aihuishou — online pawn electronics with the evaluation of investors in $2.5 billion “It was a clean CarPrice, only in the field of mobile phones: courier, auction, sale. We were to repeat this in Russia,” — says Artem.
According to the founders, at that time in Russia sold about 6 million used phones a year, mostly on Bulletin boards (Avito, “Yule”), or markets like the “Crusts”. And 85% of phones have been left to lie dormant on the shelves at home or distributed to friends and family, says Cherniak. “With a smartphone — often the third value of the asset in the family after the apartment and car. To buy the latest iPhone, the average Russian citizen need to save for a long time. In this area the buried money, so need to sell there — you only need to give a convenient tool.”
Work in What is not fully released, so SmartPrice — to maintain continuity, said the new project was launched in the office of the auctions after 18:00. Take the first step helped acquaintance with the project Trocafone, who for several years worked on a similar model in Brazil. The founders believed in Trocafone their Russian competitors, becoming their first investor (he invested $100,000 for 5% of the company) and consultants. By the time it Bolshakova and Chernyak joined by three partners — Vladislav Ovchinnikov, Sergey Rubakov and Dmitry Rudenko, familiar with the founders on the previous businesses.
The first phone SmartPrice sold in July 2017. The business model is completely copied work CarPrice: private seller posted on the website SmartPrice ad about selling a used phone, starts the auction by private buyers has made an offer, won the best bargains. But after three months it became clear that the market of used phones live by different rules. “To skonektit Sasha, who sells phone, and Petya, who wants to buy it, you need to invest serious money in marketing. The average bill of purchase of mobile is not allowed to cover these costs, the business model did not converge,” explains Chernyak.
“Nobody wanted to go into this gray market”
SmartPrice moved on to the scheme, which employed the Brazilian Trocafone: instead of joining a private seller and buyer, decided to promote a trade-in service in the salons of mobile communication. The owner of a used phone could come to the point of sales of MTS, “MegaFon”, “Coherent” and other networks and give your old phone in exchange for a discount on a new. The discount covers SmartPrice, which then buys the salons put cell phones, fixes them up and sells to the final consumer on its own website. Margin, the amount of which the founders do not reveal, covers all the costs along the way. “Most people in Russia can’t sell your phone every year is placed on the shelves of more than 20 million old devices in working condition. We give you the opportunity without unnecessary time and nerves to turn in your old device and save to a new device up to 40%,” — said Forbes, the representative of “MegaFon”.
For a model was extremely successful — they did not bear any cost but got loyal customers who are happy to go for a discount on a new flagship phone. However, the idea of SmartPrice almost all the major players reacted without enthusiasm. “Nobody wanted to go into this strange gray market. And we tried to prove that he is already huge — sold 6 million phones per year by cheque in the 5-10 thousand, and a drop in the sea. And then there are the neighboring CIS market, which is also no problem to become ours. All payments — cash, it is not controlled, take it and automate,” says Alexander. The negotiations have borne fruit: for the first six months of operation the service was able to connect a 500 phone stores.
Services play not just a role of the intermediary and takes responsibility for the authenticity of the phone and its condition, says Cherniak. When technique gets in the salon, the employee checks it for 26 parameters: appearance, memory capacity, battery status and USB connectors etc. is Done with the help of special software SmartPrice, the development of which the entrepreneurs have invested around $500 000.
According to the representative of “MegaFon”, from 2017 the glass under the program trade-in was sold 150 000 smartphones. Most often a discount in exchange for handed over the phone when you purchase the flagship smartphones — 40% of the latest models in the “MegaFon” was purchased under the program trade-in, reported network.
“Thanks to trade-in customers purchase more expensive gadgets. We see every month an increase in the average price of the sold smartphone in the first quarter of 2019, it increased by 5% to 15 500 rubles”, — said Forbes, the representative of MTS. In MTS, the average size of discounts offered by showrooms network in exchange for a broken smartphone, is 7 000 rubles, the device is in working condition — 12 000 rubles. In “the Messenger” — about 8000 rubles, gave Forbes a company representative.
Part of damaged phones are not to repair: sometimes the cost to repair is too high. For example, an iPhone with a broken Touch ID are in great demand among buyers: function does not affect the basic phone features, and buy it from this can be several thousand cheaper.
About half of the purchased phone is being repaired due to SmartPrice. First, the service gave this service to outsource, and in 2018, opened his own workshop 400 sq. m. all vehicles that passed through the service, SmartPrice gives a guarantee for a period of three months: if something breaks, the company free repair or exchange the smartphone for the same.
For two years SmartPrice raised $5.25 million of investment — in addition to the $100 000 from Trocafone in June 2017, got about $150 000 from a number of business angels, then $2.5 million in April 2018 from private investors Teodoro D’ambrosio and Marco jacks (in the list of projects in the portfolio — Airbnb, Beepi, Dreamlines, NU3, Carprice, etc.), as well as Champus Ljunggren (Swiss-Italian business angel) and the Russian venture Fund ExpoCapital. The money went to maintain operations and work on the software.
Today to get a new phone under the program trade-in is possible 10 to 500 salons across the country, the company employs 140 people. Revenue Mobitekh, OOO, on behalf of which the service works, according to the founders, in 2018 amounted to almost RUB 450 million in the first half of 2019 has already managed to earn the same buying 250 000 smartphones. In June, the project came to operational zero.
Despite the easy start SmartPrice, in General, the trade-in service in the shops is not yet popular among the population, says Elena Bogatyreva, co-founder of the service Damprodam (purchase the phone from the owners and sell to retailers). There were several reasons, she says. “The Russians subconsciously think that he is trying to cheat: give too low a price on his device, unlike Bulletin boards. In some sense this is true: the trade-in can never be more profitable independent sales. For companies it’s business.” In addition, hampered by the lack of a well-functioning system for remote purchase and exchange. “In the US the process is actually automated: the customer sends the device by mail or courier, awaiting a few days and gets the money on the card. In Russia, the major retailers require a personal appearance in the salons, at least uncomfortable and don’t offer the actual redemption — exchange only. In the future, the next years Russia will not reach the same scale of the US market,” — said Bogatyrev.
In her view, a more promising direction is to work directly with retail, no shops as intermediaries. “Developing our own product, we can give prices for returned vehicles above 20%. We are not tied only to the trade-in. Just want to sell? Yes please, to change — not a question,” — says the entrepreneur. Damprodam plans to go the way of Amazon and eBay: “Scheme for retail ready: customers we sell the old equipment, we will credit to the account of the retailers them that amount, and then they buy it and when they want to.”
Now Chernyak and Bolshakov thought about launching its own retail network of “receipts” under the brand SmartPrice where you can donate your used phone and plan to sell the recovered smartphones in boxes with their brand in third-party online stores, not only on your website. “We are now working on the white label system — customer doesn’t know what the trade-in service we provide. While offline submitted offline only at the thrift shop — any “Malinki 123″ at bus stops, so the niche is practically empty”, says the interest in the new format Alexander. Until the end of 2019 SmartPrice plans to enter the markets of Kazakhstan and Belarus, and from there to other countries of the CIS.
In addition to the role of startups, Cherniak masters and even the subsistence of the investor. In the summer of 2017, he invested $1 million in the food delivery service for FoodFox, which six months later was purchased by “Yandex” for 595 million roubles. Good call encouraged him to invest further: he is now a co-owner of Ukrainian startup training gaming Mobalytics (invested $500 000), the Ukrainian startup for booking tables in restaurants Allset ($1.5 million), which has been successfully operating on the American market, the Brazilian automotive online auction Instacarro and several others.
Most of the time he spends in Los Angeles and new York (where the entrepreneur’s own property), where it is constantly looking for new startups for investment. “People often ask me, not a lot I have undertaken in 25 years, — says Alexander. — I don’t think so, because the results in the modern world are evaluated by the amount of money earned. I have many ambitious endeavors, but not all of them make a profit. I think it’s a matter of time — I’m actively working on it”.
With the participation of Juliana Mikhailova
20 most expensive companies web — 2019. The Forbes
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In 2018, the ecosystem of “Yandex” added services “Yandex. Cloud”, “Yandex. Dialogues”, “Yandex. Plus” and “Yandex. Drive”. In February of 2018 closed the transaction on Association “Yandex. Taxi sector” in Russia and five neighboring countries. The share of “Yandex” in the new company worth more than $3.8 billion was 59.3%. Also “Yandex” bought an aggregator of discounts “Edadil” and 83.3% of service delivery of grocery sets “Party food”.
2. Mail.ru Group
Mail.ru Group continues rivalry with Yandex to diversify an online business. In the beginning of 2018, the group bought eSports holding ESforce for $100 million, and in April launched an online service medicines, “All the pharmacies”. In the fall of 2018, the group received about 18% stake in the online taxi service “Citymobil” and agreed with Chinese Internet giant Alibaba to build an online retailer AliExpress Russia.
Largest free classified ads website in Russia was founded by Swedish Jonas Nordlander and Filip Engelbert. The service was earned mostly on the service for the promotion of advertisements. For the year 2018, the number of users has grown from 32 million to 35 million people per month. In January 2019 Fund Naspers bought 29.1 percent of the company’s shares for $1.16 billion, bringing its stake to 99.6%. So the service received a valuation of $3,85 billion
Founded in early 2000-ies Wildberries company started with the sale of clothing through catalogs. Now it is the largest online retailer, the revenue of which is growing every year. The founders, wife of Bakalchuk, once admitted to Forbes that you never imagined that will create a superproject. But by the end of 2018, the revenue of their company exceeded 100 billion rubles, and assessment of capitalization — $1 billion
5. Ozon Group
In March 2018 MTS has invested in online retailer Ozon 1.15 billion rubles, having increased its share from 11.2% to 13.7%. Later, the Telecom giant has increased its share already to 16.66%, the transaction amount was not disclosed. The funds raised Ozon invests in infrastructure and new projects. In 2018, he received a license for pharmaceutical activity and began to deliver the medication at home.
HeadHunter is a leading sites for job search in Russia and CIS countries. In 2017, the service has announced plans to go public in 2018 on the NASDAQ. He hoped to attract investors $250 million, which would mean a valuation of $500 million eventually, according to some, the deal was called into question because of the stringent U.S. sanctions, adopted in April 2018.
“Citylink” is the only online retailer on the Forbes list, which specializiruetsya in electronics trade. The company is actively increasing its presence in offline: the number of its stores increased from 44 to 80. The retailer has a network of 470 points for issuing and receiving orders “Sitilink-mini”. By the end of 2019, the company plans to increase the number of stores to 200, own collection points to 600.
In 1999, Novosibirsk businessman Alexander Sysoyev came up with to unite the city map directory. Today the service is used monthly 45 million people from 370 cities in nine countries. In 2018, the American company Apple has included data 2GIS in the standard Maps app. In addition to maps in the service of 2GIS also presented about 60 free travel guides to different countries.
The last few years, online retailer of clothing and footwear Lamoda is actively developing b2b-direction: the shops-partners had the opportunity to use the logistics and infrastructure of the company. Now on this model Lamoda has partnered with 20 major brands. In 2019 Lamoda plans to open its first offline store of almost 1000 sq. m.
10. ivi In 2018 the revenues of the largest Russian online cinema ivi has increased by more than half. Pay model in its structure became the main, finally overtaking is. According to the founder of the service, Oleg Tumanov, by 2020, the ivi may go for an IPO on the NASDAQ, if you keep the pace of growth. Recently the service became available on consoles for the TV Roku in the US, Canada and UK.
Service for search and reservation of air tickets Aviasales belongs to the structure of the Go Travel Un Limited with its headquarters in Phuket. For 2018, the year its audience has grown from 10 million to 12 million unique users per month. In early 2018, the company entered the market of Kazakhstan, which earned the website aviasales.kz and in July launched together with the Amazon search portal for tours and tickets avitotravel.ru.
12. Profi.Ru the idea of the service belongs to Serhiy Kuznetsov, who, as a graduate student of MIPT, worked as a tutor and in 2006 created a website for search orders “Your tutor”. Later he was joined by Egor Rudi, they combined several projects into one Profi.ru. The service earns a Commission with each service provided. In 2018 through Profi.ru carried 2.8 million orders.
13. Onlinetrade.Ru the Internet-shop “Onlinetrade.ru” sells products in 30 categories, including electronics, appliances, pharmaceutical and cosmetic products, furniture, clothing and even food. Its network is comprised of 390 points of delivery of the goods in 102 cities of Russia. The retailer handles more than 16,000 orders daily. In 2018 he launched in Khimki transport and logistics complex with an area of 23 000 sq. m.
Online English school Skyeng has developed rapidly over the year 2018, the number of teachers registered on the site increased from 2200 to 5440 people, and students from 19 500 to 52 500. The company’s revenue has doubled compared to the 2017 year. In January 2018 Skyeng attracted funding from the investment Fund Baring Vostok, said the deal valued the startup at about $100 million
The company originated as a joint venture Sergey Ryzhikov (Bitrix) and Boris Nuraliev (1C) and the development of a management system websites and online projects. Initially, the main income came from the sale of licenses to web design and web development (more than 15,000), but now most of it provides “Bitrix24”, which develops CRM and service management business in Russia and around the world.
Technology company that grew out of the branch of the investment company “Severgroup” Alexey Mordashov. 2017 brings together several projects in the field of education and employment: “Netology”, “Foxford”, “Repairman.ru”, FL.ru, Potok, JungleJobs. The largest project of the group — “netology-group”, included into the structure in August 2017, provides about 80% of annual revenue.
17. CYANOGEN Groups
In five years the portal cian.ru turned into blockbuster service rental and sale of real estate. Now his audience of more than 12 million people per month. In 2018 CYANOGEN announced the launch of the service a mortgage approval from banks: buyer fills out a questionnaire online, choose the suitable offer, refers to the Bank scans documents and receives the consent or waiver.
B2B-Center helps large organizations to select contractors for complex services and look for expensive industrial equipment. In 16 years on the court has been more than 1.1 million trading on 16.1 trillion rubles. In January 2019 B2B-Center has launched a B2B-Start for medium-sized businesses to participate in tenders for it, every registered company, in this case an electronic signature is not required.
The launched portal Superjob Alexei Zakharov, then owned by the developer of sites “Triumvirate development”. For 19 years, the service has not changed the founders. The company has a non-profit direction “vocational Guidance” – experts Superjob are in universities with lectures on how to build a career. According to Forbes, Superjob has a share of more than 20% in the market of online services for job search.
The service YouDo unites customers and providers of different jobs: courier services and freight, repair, cleaning, computer help. On the website generated more than 4 million jobs and was around 1 million performers, from which the fee is charged for information about their services. In 2018, MTS bought a 13.7% stake in service for $12 million Earlier in the project, invested venture Fund Sistema Sistema VC.
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