russia is watching The exodus of entrepreneurs, computer programmers and other educated middle-class citizens due to Western sanctions and political instability has made international business in the country impossible.
Russia’s invasion of Ukraine has forced millions to flee their homes fearing for their lives. But the war also caused Russians to leave their homeland. I spoke with a number of Russian entrepreneurs and venture capitalists who shared their reasons for leaving or are leaving their home country. But as they try to start over abroad, anti-Russian sentiment and economic sanctions will haunt them.
Eugene Konash’s staff in Russia works remotely for his London-based game studio as Russia continues to build up troops on the Ukrainian border in mid-February dc1ab, increasingly worried. But like many others, he did not expect a full-scale invasion.
His hopes that the tensions would subside quickly evaporated. When it became apparent that Russia was waging an all-out war against Ukraine, Western countries began imposing sanctions on Russia. Businesses felt the impact immediately.
An employee of Konash discovered that their bank had been sanctioned, preventing international transfers to his account.As the ruble depreciates, long lines form outside Russian banks as citizens scramble to convert their savings into dollars – only to find high fees and government Restricted access to foreign currency.
Konash’s turning point came when investors told him unequivocally that if his startup continued to have such a large presence in Russia, it would not be able to invest. His team in Russia agreed it was time to leave.
“Those who even said a month ago that they would not leave Russia under any circumstances are talking about grabbing their stuff and actually driving to Kazakhstan across the land border because the tickets to leave are either sold out or very expensive, ‘ Connash said.
Like many tech companies with an international reach, Konash’s gaming startup employs developers in Eastern Europe, providing access to affordable, quality programmers in the region. Originally from Belarus, Konash knows that the emphasis placed on science and math education in former Soviet bloc countries helps a world-class engineering and science workforce thrive.
In addition to financial sanctions, it became impractical to run an information technology company in Russia as foreign technology services were either banned or started to retreat.
Google and Microsoft All sales in the country have been suspended while Russia tries to block Facebook, Instagramand Twitterdespite the The results were mixedAfter the ban, some users still have access to these US platforms, suggesting that Russia may be some distance away from having a censorship machine as powerful as China’s.Facebook and Twitter said they were working to restore service in Russia.
“Who knows when dev tools like Unity will be blocked?” said a Siberia-born gaming investor who left the country after the 2015 annexation of Crimea and subsequent Western economic sanctions. “No one wants to end up in a country where they can’t have contact with the outside world.”
The investor declined to be named due to concerns about the Russian government’s crackdown on dissidents.
half a foot away
After the invasion of Crimea seven years ago, many Russian-made companies began merging elsewhere to reassure investors about the political risks and optics of backing Russian companies. Previously, many of these companies were only operating abroad on paper, and their teams were often still entirely based in Russia. But the full-scale invasion of Ukraine has turned into a trickle.
“After 2015, companies started to leave Russia legally,” observed an investor in a venture capital firm that recently relocated its Moscow team out of the country. Even before the Ukraine crisis, the company would only back one Russia-based startup if it was established abroad and had an international focus.
“Physically, these startups will still be headquartered in Russia. They will conduct research and development there because the cost of living is low.
Nikita Blank, who changed her last name to Akimov four years ago, said that until recently, as a startup incorporated overseas, life itself sounded easy for all intents and purposes operating in Moscow.his company hey everyoneTools are being built to automate investor relationship management and are currently being consolidated in Delaware.
The startup never intended to serve the Russian market alone, but Blank and his wife chose Moscow as a base because they had clear benefits: their parents could help care for their three-year-old daughter; the country’s internet speeds at the time Fast, cheap and free; Moscow is full of tech meetups, and Blank found like-minded founders here.
The Blanks enjoy the best of both worlds in their entrepreneurial life when Russia’s attack on Ukraine comes to an abrupt end. Three days after the invasion, Nikita’s wife Valentina lay in bed, distraught as her country fell apart. She decided it was time to leave.
“I can’t do anything at work. Part of my family is from Ukraine,” she said. “It will be difficult to leave with the kids, but I don’t think the situation will change. So we packed 23kg each and bought a one-way ticket.”
The couple moved with their young daughter to Georgia, one of Russia’s top destinations for the current brain drain. It is a relatively affordable and accessible country for Russians, along with Turkey, Armenia, Kazakhstan and Thailand, and is a popular country choice.
The venture fund that recently left Moscow has been evacuating hundreds of Russian citizens, mostly its own employees and portfolio companies, out of the country over the past few weeks. On the internet, Telegram groups have sprung up with tens of thousands of Russians discussing exit plans and helping each other.
“We Russians are screwed”
With sanctions on Russia tightening daily, would-be migrants must make an immediate escape plan: Which countries are still flying Russian flights and how will they move their money?
Sanctions continue to affect Russians fleeing abroad, even those who have long since left. Well-known financial infrastructure providers such as PayPal, Mastercard and Visa Suspended operations in Russia, which means expats using Russian banks cannot use their cards overseas.Estonia recently pause Electronic residence applications for citizens of Russia and Belarus to “prevent sanctions evasion and possible illegal activities”. EU regulators have it is said Tell some banks to review transactions of all Russian customers, including EU residents.
The breadth of this wave of sanctions is prompting some to give up their Russian passports.This Siberian-born gaming investor is looking for a Singaporean Citizenship, fearing that their Russian citizenship could keep them out of the dollar-based financial system.
“Ukrainians are accepted as refugees all over the world, but we Russians are screwed,” lamented the investor.
Others are betting that cryptocurrencies can help them evade sanctions, such as Blancs, who put a lot of their assets into cryptocurrencies five years ago. Gaming entrepreneur Konash expects bitcoin and ethereum to be the last resort for cross-border payments if his employees are stuck in Russia for longer.
While major exchanges like Binance and Coinbase have No blanket ban on all Russians, they comply with sanctions to deter targeted individuals.Binance CEO Keep Since transactions are recorded on a publicly available ledger, cryptocurrencies are not a possible escape route, making it easy for governments to trace.
But EU regulators continue debate Sanctions imposed on Russia and Belarus extend to all crypto assets, as well as U.S. lawmakers urged The Treasury Department ensures that Russia cannot use cryptocurrencies to evade sanctions.
“Calm is the new currency”
Those who leave Russia face the obvious hardship of being left behind from family and friends, but the greater pain comes from their different perceptions of recent events.
“Our parents and older relatives kept telling us to go back, saying, ‘Everything is fine here. Russia is great,'” Blank said in a tone of disbelief but sadness.
These educated, freedom-seeking Russian tech workers may not be looking back. The Russians I spoke with, who were either leaving the country or helping others flee, were surprisingly calm in recounting their country’s plight, in part because they were mentally prepared for the inevitable goodbye.
“Our investor, SOSV, taught us to be cockroaches and adapt to new circumstances as entrepreneurs. This philosophy is now helping us navigate these uncertain times,” Valentina Blanc said. “Calm is the new currency.”
Immigrants like Blanc are likely to be the last wave of Russia’s long-term brain drain, going back decades.
“What strikes me is that if you look at all the great engineering and scientific talent that the Soviet Union and Russia produced — most of them would take every opportunity to leave the Soviet world,” Cornash said.
“Who will this leave behind in the post-Soviet world? For me, the last wave of the brain drain is the death knell of the educational and cultural science traditions, which may have been one of the few positive outcomes of the Soviet Union.”