Two new dollar billionaires appeared in Russia

U.S. fund Insight Partners agreed to buy Veeam Software, a startup founded by Russian entrepreneurs, for $5 billion. Thanks to this deal, Veeam founders Ratmir Timashev and Andrei Baronov became dollar billionaires.

U.S. venture capital fund Insight Partners has signed an agreement to purchase Veeam Software, founded in 2006 by entrepreneurs Ratmir Timashev # 168 and Andrei Baronov # 146. It is announced on the website of Veeam. The deal was valued at $5 billion and is expected to close in the first quarter of 2020. Other details of the deal, including the current composition of Veeam’s shareholders and the distribution of shares between them, are not specified in the statement.

Timashev and Baronov have been on the list of the 200 richest Russians since 2017. In 2018, the wealth of each of them was estimated at $950 million. In the last ranking, published in the spring of 2019, the assets of businessmen were $700 million. Based on the amount of the deal and the value of other assets Timashev and Baronov, Forbes estimates the wealth of each of them at $1.2 billion

After the deal Insight Partners will become the sole owner of Veeam, the businessmen will leave the Veeam board of directors. Forbes USA, citing a company representative, writes that Timashev and Baronov will leave the company altogether by mid-2021, but will continue to advise the new management team. The founders will continue to receive a good share of Veaam’s profits in the future, a source at Insight Venture Partners told Forbes.

Veeam is now headquartered in Bar, Switzerland, but under the new owner the company will become U.S.-based and its management team will move to the U.S., the report said. Exactly where the new headquarters will be located is not reported. A spokesman for Veeam did not provide comments.

This is the largest takeover of a conditionally Russian company, cybersecurity expert Kirill Kerzenbaum states. “Conditionally – because Veeam initially positioned itself as a Western company. Its founders and the fact that the majority of Veeam’s software developers are located here associate it with Russia. But it is not quite clear whether the American owner would want to rely on development in Russia in the future, given the geopolitical situation,” he explains.

Veeam develops various products in the area of data backup, recovery, protection, security and cloud storage. “Veeam’s strong development, its strong ability to retain customers, its unparalleled data management solutions, and its ability to enter new markets make it one of the most interesting software vendors in the world,” said Insight Partners Managing Director Mike Triplett.

Insight Partners bought a minority stake in Veeam back in 2013 (the size of the stake and the amount of the deal were not disclosed) and remained an advisor to the founders for many years, Timashev told Vedomosti. He noted that he had known the fund’s partners Jeff Horing and Triplet since 2002, when they invested in their first company with Baronov, Aelita Software. They sold it in 2004 to California-based Quest Software for $115 million, but Quest Software was later taken over by computer maker Dell.

Last January, Insight Partners and a Canadian pension fund invested $500 million in Veeam. Experts called it one of the largest deals for companies with ties to Russia.

Veeam’s revenue reaches $1 billion a year, the company reported, and Timashev told Bloomberg that Veeam expects a profit of $100 million in 2019.

Last month, it was reported that Timashev sold a stake in his other company, 5nine. As Vedomosti reported, all of 5nine was bought by cybersecurity company Acronis of Sergey Belousov and Ilya Zubarev. The size of Timashev’s stake is unknown, but experts estimated the deal at tens of millions of dollars.

Timashev and Baronov also founded the ABRT Venture Fund.