Alexander Galitsky: From a Theoretical Physicist to a Global Investor

Alexander Galitsky wanted to become a journalist in childhood and sold electric guitars. Today he’s the founder of one of the most successful investment funds in technological innovation. What path has the IT-entrepreneur taken?

Alexander Galitsky’s biography

Alexander Galitsky was born on 9 February 1955, in the village of Zarechany, Ukraine. In childhood, he dreamed of becoming a journalist and even wrote several stories, one of which was printed in a regional newspaper. Alexander was preparing to study journalism, but his father talked him out of it. As a result, Galitsky successfully graduated from the Moscow Institute of Electronic Technology.

As a student, Alexander underwent practical training at Zelenograd’s Microdevice Research Institute, which was part of the ELAS research and production association. There they created space systems based on cutting-edge microelectronics. Galitsky stayed to work in the institution after graduation from the institute, he managed to make a career and realize his potential. In 1987, Alexander headed the department of computer systems and satellite software, at only 32.

A working visit to Silicon Valley had a strong influence on the young physicist. He was taken around labs and met with many famous scientists and researchers. One of them, Geoffrey Baehr, later became Alexander Galitsky’s partner in Almaz Capital Partners.

Another milestone in Galitsky’s life was his close cooperation with Sun Microsystems, the American corporation that was setting trends in the Internet and IT at the time. Thanks to it, today we can use such technologies as VPN, Java, the RICS architecture, and the firewall. Sun challenged Microsoft, founding a culture that was later implemented in Google. In 1993, Galitsky and his team developed a built-in module for laptops or PCs, a prototype of the device currently known as Wi-Fi. In 1996, Galitsky’s team created the first VPN for Windows.

On the history of Alexander Galitsky’s Almaz Capital fund: past, present, and future

A milestone for Alexander Galitsky was the First European Tech Tour in Russia for foreign investors. He saw many promising companies – Yandex, Kaspersky Lab, SWSoft – that needed investment, and were attractive to foreign companies. Then it was decided to establish an international bridge venture fund that would be able to accumulate investments in promising projects at the initial stage of their development.

In 2008, the first Almaz Capital fund appeared, and Alexander Galitsky became its managing partner. A great deal of attention was paid to the search for companies of interest to investors. Projects were sought out at specialized forums, by selecting applications from company representatives and watching presentations, through personal acquaintance with CEOs, networking, and through a partner network. Companies were selected very carefully: out of every thousand projects found, about 50 were picked for consideration.

The main LPs of the Fund were well-known institutional investors: the European Investment Fund, Cisco, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation. Galitsky’s partners in the fund were Pavel Bogdanov, Charles Ryan and Peter Lukyanov. Geoffrey Baehr was a former general partner at U.S. Venture Partners, was appointed as an advisor.

A little later, the fund continued to exist without Peter Lukyanov. With his partners, Alexander Galitsky created Almaz Capital II. Since 2014, Almaz Capital stopped investing in projects of Russian origin. The Fund II was registered in Luxembourg, operating in the markets of the CIS, Eastern Europe, and the USA.

Over the years, Alexander Galitsky’s Almaz Capital has helped to bring promising developments of several dozen companies to the global market by investing in their activities. Since its foundation, Galitsky’s fund has invested about $300 mln in over 50 companies. General Catalyst and Tiger Global Management, Bessemer Venture Partners and Khosla Ventures, Founders Fund and GGV Capital have acted as co-investors in various projects.

Among the key deals to bring IT startups to the world market, there are many successful projects. During its existence, Almaz Capital has invested in 50 projects, with the investment amount reaching $300 mln. The fund’s most successful exits are the sale of stakes in Qik, Sensity Systems, Yandex, Acumatica and Xometry. As of May 2022, Almaz Capital exited 18 of its projects.

From the very beginning, Alexander Galitsky’s Almaz Capital fund was focused on the western market, as the B2B sector is actively developing there.

In 2020-2021, the fund’s efforts to find new projects and close deals was reformatted into a virtual environment. Galitsky and his team always focused primarily on people – executives and key staff – when assessing project prospects. So in the first pandemic months, the fund worked with projects with which it had already concluded preliminary agreements. At some point, they had to start working on new projects and get to know company founders online. It was difficult, but in 2020-2021 Almaz Capital invested in five projects. And the third fund of Alexander Galitsky was closed in 2021 with $191 mln.

Alexander Galitsky – changing the focus of attention

In parallel with his work at the fund, Alexander Galitsky participated in public projects previously aimed at the development of international relations and economic activities: Skolkovo, Skolkovo Venture Investments, Alfa-Bank, Megafon, RVC Council, IT Development Panel under the Russian Ministry of Communications and Mass Media, the Venture Market Council, the MSU business incubator, and the Russian Quantum Center. However, the change in the development strategy of the institutions fundamentally affected the relevance of Galitsky’s presence in them. The entrepreneur decided to discontinue his public activities and left the posts.

At the same time, Alexander Galitsky received many awards and titles during his work. In 2000, Galitsky received the title of Technology Pioneer at the World Economic Forum held in Davos. In 2012, he was nominated Investor of the Decade in The Investor AllStars Awards. In 2013, Alexander won the Russian stage of the most prestigious international contest Entrepreneur of the Year organized by EY.