Slush and VC pitch judges revoke decision to hand $1M to Russian founders after industry outcry

Immigram — a talent immigration platform founded by two Russian passport holders which last week won the startup pitch stage at the large Slush conference in Helsinki — is now out of the competition, after a swirl of controversy enveloped the decision in light of Russia’s invasion of Ukraine.

This morning, Immigram made a statement that it was “opting out” of the competition, but moments later, the Slush organisation said on Twitter that it was removing the award from Immigram.

TechCrunch understands that the VCs which were brought together to fund the $1 million investment which was the competition’s ‘prize’ (Accel, General Catalyst, Lightspeed Venture Partners, NEA and Northzone) had advised Slush to make the decision only after doing their own due diligence into Immigram, post the competition. More on that later.

For it’s part, Slush has said it had revoked Immigram’s win “in light of new information”; requested the investors to pull their investment; and apologised to attendees “for this oversight”. It added that “we should have reviewed all participants operations more closely before entering into the competition”.

Over the weekend it issued this statement: “Slush stands with Ukraine and condemns the Russian invasion of Ukraine. For this reason, we do not partner with Russian companies or funds or accept startup or investor applications from companies based in Russia.”

Immigram was launched in 2019 by two Russian founders (with one living in the UK since 2016), but as a UK legal entity based out of London. It’s principle offering is a platform-based approach to the complex process of navigating the increasingly widespread “Global Talent Visas” across 10 countries searching for high-tech talent, especially Post-COVID.

Specifically, it is advertised to talented people in Russia, Ukraine, Belarus, India and the US to apply for the UK’s global talent visa, in the first instance. The company says that applicants from Eastern Europe make up a minority of its users.

However, perhaps because of its founder DNA, Russia was among the early countries where Immigram first launched its operations, in order to assist Russians to obtain said visas.

In 2019 Immigram may well have been a relatively uncontroversial startup and might well have attracted little attention.

But in April this year – barely a month after the brutal invasion of Ukraine by Russia – it raised $500,000 in a funding round led by Xploration Capital, but also from Mikita Mikado, a Belarusian founder immigrant to the U.S. and СEO of PandaDoc.

A casual observer may well have commented at the time, that Immigram’s growth might have been connected to the desire by many Russians who disagreed with the war to leave the country, or who wanted to avoid its consequences. It is of course impossible to say either way, since every individual is different.

But it’s worth nothing that Mikado has also made anti-Putin statements and had to flee Belarus because of the Lukashenko-backed government, a Kremlin ally.

Other investors included Joint Journey Ventures, angel investors and Hatchery, a startup incubator run by University College London.

It was in this context that Immigram came to pitch on the Slush stage last week, after a heavy-vetting process by Slush which consisted of four separate stages, and after over 1,000 startups had applied.

But when it emerged shortly after that she and co-founder Mikhail Sharonov (base in Georgia) were still both Russian passport holders (although living outside Russia for several years), social media – particularly on LinkedIn – lit up about the decision, and focused on this aspect of the pitch competition’s decision.

Among them, an extensive post by Yaroslav Krempovych of Movens Capital in Warsaww went viral over the weekend, after criticising the decision to hand the award to Immigram.

“While some startup founders fight and die on the frontlines for the lives of their families and loved ones and their country’s freedom, others seek to assist Russians to escape the repercussions of their acts and inactions…” he posted.

Several other commentators, including TechUkraine, assembled yet more critical posts of the decision.

To add fuel to the fire, Immigram had pitched during the competition against a Ukrainian startup, Zeely, a platform aimed at emerging markets allowing consumers to launch web sites easily from their phone.

Most observers have called the decision by Slush to include Immigram in the competition “tone-deaf” at the very least, coming the same week as Russia was shelling Ukrainian cities. Furthermore, the VCs involved have come under criticism for not engaging in greater due diligence during the pitch competition, or ‘reading the room’ regarding the background of the startups involved.

The fallout from the incident has been considerable.

Mirolyubova said in a LinkedIn post on Sunday she “can not understand all the horror Ukrainians are facing now. But I truly emphasise and stand with Ukraine. We do not support the aggression and the invasion and never have.”

But she also said she has now “started getting death threats and wishes, for rightfully winning a startup competition with a wrong colour of the passport.”

“My co-founder’s Mikhail Sharonov’s family comes from Odessa, Ukraine, my father is from Tatarstan. But both of us happen to have a red [Russian] passport. The very nature of Immigram is to help talents (from small Indian towns to Nigerian villages) with any passport to live and work in developed countries without racism, xenophobia and hate… I wanted my business to be judged, not my nationality,” she added.

Immigram has previously said (in April) that it was offering a service to talented Ukrainian IT specialists to move to the U.K. via the Global Talent route, but that it had since waived the payments for Ukrainian clients after the war broke out, and helped buy an ambulance car for the Ukrainian frontline.

After winning the competition, Immigram said it would donate $100,000 to Ukrainian NGOs assiting the war effort.

However, the company has had to face questions about its operational strategy. While Immigram does not have a legal entity in Russia, nor does it base any employees there, AIN.Capital, a CEE tech news site, published images from a Russian job site appearing to show Immigram hiring for roles in Moscow.

Mirolyubova has countered this, saying that the company simply uses these Russian job sites to advertise for roles outside Russia such as in Georgia, Armenia or the UK, and where it can then also offer its Talent Visa platform.

That said, TechCrunch has uncovered an investor in Immigram who maintains close links to Russia.

Sergey Dashkov, head of Joint Journey Ventures, a Cyprus-based early-stage investor in Immigram, recently listed his location on LinkedIn as “Moscow” but this was changed only after TechCrunch contacted him for comment.

Speaking to TechCrunch, he said: “I maintain several addresses in many countries. Now I’m in Limasol, Cyprus. I live between Russia, UAE, Singapore, Cyprus. Mainly live in Internet [sic.].”

On May 31 this year he also appeared in an article, by Russian-American journalist Daria Solovieva, headlined “How this Moscow-based VC investor navigates uncertainty in times of war.”

The article detailed how Dashkov had invested in 112 companies since 2016 and he did “not differentiate between Russian, Belorussian or Ukrainian founders and “[I] still have “many” Ukrainian companies.”

He also said “times are not good, but they produce strong people” and “what doesn’t kill you makes you stronger,” in a clear reference to the conflict in Ukraine.

Although Joint Journey Ventures said it had suspended new investments in early March, Dashkov was quoted as saying he is still monitoring the “best deals that appear on his radar.”

He added: “I’m sure in five-six years’ time, we will see Russian companies that become unicorns, despite all the complications and barriers now.”

Speaking to TechCrunch, Immigram founder Anastasia Mirolyubova said Immigram had taken Joint Journey’s investment several months before the war started: “We took this investment [from Joint Journey Ventures] before the invasion started, in December 2021. The fund invests in a number of great European and US companies. We were not previously aware until today that Sergey lived nor spent any time in Russia.”

For its part, the Ukrainian startup Zeely, which has been overshadowed by the Slush controversy, declined to comment on the jury’s decision but said it stands “in an explicit anti-Russian position. A terrible, bloody war continues in our country, where our citizens are dying and we do not tolerate neutrality. We must all be unanimous. We are against cooperation with Russia in any of its manifestations,” it said in a statement.

Commenting, Borys Musielak, founding partner at SMOK, a prominent Polish VC, said on LinkedIn that the incident was a “PR fuckup… awarding a major European startup award to a Russian team Immigram that helps Russians escape Russia as a consequence of Russia invading Ukraine… while Russia was shelling the country at the same time. You should have known better Slush, Accel, Northzone, General Catalyst, Lightspeed Venture Partners, New Enterprise Associates (NEA). I’d love to hear an explanation from the GPs on the picture why you thought this was a good idea.”

“But recognising a Russian startup, which is currently hiring in Moscow, at such a serious event, with the applause of top VCs… it’s not only a PR shot in the foot, but most of all, a very real shot in the back of the Ukrainians,” he added.

While so far there has been no official comment from Northzone, Lightspeed, General Catalyst, Accel and NEA, TechCrunch spoke on background to sources close to the decision-making process among the VC judges.

A source close to the judging panel told TechCrunch that the judges’ decision not to go ahead with the investment had nothing to do with the founders having Russian passports, but because too many of its customers, outside of the other countries it serves, were from Russia.

“The business is indirectly getting more traction because of the war, not because Immigram did anything wrong, but because most of the applicants on their platform are currently Russian,” they told TechCrunch, and this hadn’t been previously clear to the judges.

Once Slush and investors learned this, they said, Slush made the final decision: “This is a consequence of trying to make a live investment decision.There’s a reason firms do due diligence after they sign a term sheet. Typically investments aren’t public for weeks/months after when all diligence is done.”

They said the VC judges don’t blame Slush or Immigram for the situation but in light of the information about the bulk of it customers “it felt inappropriate to invest.”

They added that this was “a true edge case – a bunch of people trying to do the right thing including the founders.. very unfortunate.” They said the whole situation was “much more nuanced and well-intentioned” than the comments on social media have suggested.

Slush and VC pitch judges revoke decision to hand $1M to Russian founders after industry outcry by Mike Butcher originally published on TechCrunch