The “Money Talks” session continued with Loic Le Meur’s conversation with Alexander Tamas, Partner at DST International. DST is originated from Russia and grew out of the social networking company Mail.ru. At some point DST started making international investments and Facebook was their first international investment. They invested more than 500 million $ in Facebook overall.
Before investing in Facebook, DST owned and ran a social network in Russia. Russia was leading as far as social networking was concerned – from the first day the people in Russia are coming online they have social networks and social networks were number 1 or number 2 websites in Russia. In all the other parts of the world people started using internet with email and social networking was more like an add-on. So overall the dynamics in Russia were different and social networking was for them a very profitable business. They soon realized that it was only a matter of time for Facebook to become really large worldwide.
Mailru is the biggest tech IPO in Europe – 8 billion $ valuation at the present moment. Tamas’s advice is that ”You should go public when it makes sense for the company not because you want to earn more cash”.
DST invested about 150 million dollars in Zynga but they didn’t agree to disclose at what valuation.
As far as Groupon is concerned, according to Tamas the Groupon management team realises that they have quite a business going on so they are not very keen on selling it. Tamas compared Groupon and businesses to books – some books last for generations and Alexander Tamas thinks Facebook, Zynga and Groupon are the kind of companies people will talk about in some years as well. Tamas says Groupon know they have something very special going on and they have the potential for a generation-defining business. Facebook, Groupon and Zynga are all long-term companies like classic novels and stars in the astronomical sense
Tamas’s mantra seems to be “don’t sell early, keep growing”. According to him DST are seeking companies with tremendous growth minimum 1 billion $ valuation and a strong growth outlook. In Europe there are companies who have an exit plan in the business plan presentation even if they haven’t started yet which to Tamas seems funny and a mistake.
According to Tamas, the chance to build something meaningful is a once in a lifetime opportunity “No exit money can pay for the fact that one can build something special, something significant!”.DST is not an early-stage investment company, they are a very small company and cannot afford early-stage. According to the DST International partner Foursquare has a tremendous amount of potential ahead of it but it’s still a bit early.
