Singapore: Researching strollers for a new-born is not what one associates with serial entrepreneur Serguei Beloussov. The chief executive of back-up and disaster recovery software vendor Acronis was engrossed in doing exactly that when MintAsia caught up with him.

After studying strollers on offer from across the world on the Internet, he zeroed in on an American brand for his baby. “It can assemble and collapse by itself, has a power back-up and I can charge my iPhone; it has a detachable part that can be used on the car seat for the baby," he said, explaining his choice at the start of the interview.

In his entrepreneurial journey, Russian-born Beloussov hasn’t been that much of a small-picture man. Once he gets a start-up off the ground, his approach has been to step away and stay hands off.

In May 2013, Beloussov returned as chief executive officer of Acronis, the data protection company he co-founded and had left in 2008 after disputes between management and promoters.

“Life is short and there are not too many big opportunities, and Acronis is in a very good market—the next step is to grow the company to a couple of billion dollars in revenue, from a couple of hundred million right now—target is a ten-fold growth in revenue," he said.

According to Beloussov, the data protection and storage market is expected to be worth $30 billion by 2016, and Acronis, with its 30,000 partners across 90 countries and serving over 300,000 businesses and five million consumers, has the opportunity to be a leading player in the segment.

Acronis, which has 700 employees and competes with the likes of Symantec, CA Technologies, BMC Software Inc. and International Business Machines Corp., moved its headquarters from Boston in the US to Singapore recently.

It will also examine the possibility of an initial public offering (IPO) in 2016.

“Listing has multiple purposes—one of the purposes is to give liquidity to shareholders and to motivate employees. We will consider listing for Acronis, but not earlier than 2016. Now we are fully focused on growing the firm. If we list, it may not be in Singapore—I have not thought about it so much. We did file for an IPO twice in the past, but it did not go through due to management changes," he said.

Beloussov has been associated with Singapore for 21 years, and has spent the last two decades shuffling between Russia and Silicon Valley in the US.

“Until 1995, I was mostly in Russia and partly in Singapore. From 1995 to 2003, I was shuffling between US and Singapore. From 2003 till last year, I was mostly in Russia and US, and a little bit in Singapore," he elaborated.

Beloussov, 43, is now a Singapore citizen.

While growing up in Russia, Beloussov planned to be a physicist as his parents were physics professors at the Saint Petersburg State University, the second largest university in the erstwhile Soviet Union. He attended a specialized school for mathematics and physics students. Being among the top 10 students in the Soviet Union for performance in physics and mathematics Olympiads, he went to the Moscow Institute of Physics and Technology, widely regarded as the best University in Russia for these subjects.

He graduated from the Landau Institute for Theoretical Physics, and while doing his masters, he co-founded his first business, Unium (Phystech College), that provided course materials for students of science.

He is no longer associated with this company, but the business still exists and caters to about 10,000 children, with a revenue of $10 million annually.

Again, during his masters, in November 1992, he joined a small Russian firm called Sunrise that was involved in assembling and selling personal computers (PC), and rode the boom as the computer market in Russia expanded from 20,000 units annually to two million within two years.

During this period, Beloussov became an equity partner in Sunrise, which had become one of the largest PC retailers in Russia and had about 10 subsidiaries in the surrounding regions.

Sunrise also brought him to Singapore and he opened an office in the city-state in 1994 to source components.

He split with Sunrise in 1994 and ventured into electronics manufacturing with Rolsen. “At the time I was leaving, Sunrise was about $250 million in revenue and the first company I had started after that was a copy of Sunrise—Falcon—it was also making money—about $50 million in revenue—it was sold later—and then quickly we started Rolsen," he said.

Over the next decade, Rolsen, with offices in Singapore, San Francisco and Russia, and manufacturing plants in Russia, South Korea and China, became the No.1 TV appliance vendor in Russia and, at its peak, had a revenue of over $500 million and 500 employees.

“I still have some equity, but am not associated with it anymore. Today, they are at around $200 million in revenue—they make consumer electronics and sell it in Russia. It is a healthy business. I was closely involved with Rolsen till 1997 and partially involved till 2003," he said.

He finished his masters in physics and electrical engineering in 1995 and also holds a Ph.D. in computer science, all from the Moscow Institute of Physics and Technology.

From 1997, he shifted his focus to software. The trigger was the interactions with his Russian classmates, who had migrated to the US, and had convinced him that business opportunities of the future lay in this space.

In 1996, he founded Solomon Software with the aim of handling enterprise resource planning (ERP) for Rolsen, and within two years, the firm had brought down 60 engineers from Russia to Singapore to develop software for international clients, largely based in the US.

Beloussov recalled that Microsoft Corp. founder Bill Gates, during his visit to Singapore in the late 1990s, had been impressed with the work Solomon Software was doing. Incidentally, Solomon was acquired by Great Plains Software in June 2000 and it was subsequently acquired by Microsoft in May 2001 and is now known as Microsoft Dynamics.

His next software venture was in 2000 when he founded software development company SWsoft in Singapore.

“In 1999, we started looking for something else—we wanted to use our engineering expertise, and also our executive team in the US to raise money and outsource projects back to us—and it led to SWsoft that focused on server automation and virtualization software," Beloussov said.

The initial vision was to make SWsoft an application service provider (ASP), now popularly referred to as Cloud Services and Cloud Applications.

The company was renamed Parallels in 2007, after it took on the name of one of its most successful products.

The story of SWsoft, Parallels and Acronis are related.

According to Beloussov, information technology can be broadly divided into three segments—computer, network and storage. “If you want to do all three, then you have to build a platform like what Amazon does. Parallels is focused on compute and Acronis on storage."

Acronis was initially a business unit of Parallels, but in 2004, it was spun off as a separate entity. The same year, the company raised $11.1 million funding from Insight Venture Partners and OpenView Venture Partners. Beloussov and the other founders continue to be the majority owners of both Parallels and Acronis.

Parallels is a global player in hosting and cloud service enablement and desktop virtualization, and currently has about 950 employees, several hundred million dollars of revenue and its cloud service offerings are used by 50 million customers, according to a presentation that was shared by Beloussov’s office.

“Parallels is doing fine and growing—it is larger and slightly more profitable than Acronis—with a revenue of more than $200 million. I am chairman, but not actively involved. People are always writing about Parallels’ listing, but an IPO is not happening soon," he said.

After being actively involved with Acronis until 2005, the company brought in professional management, and Beloussov stepped back and remained chairman. “In 2008, we had a big conflict with the management on the listing of Acronis and I resigned from the company."

All the companies he has launched have been profitable from their early days. “We had no chance for survival, but to make money. There were no PE or VC ecosystems—none of the companies until SWSoft were technology start-ups, but largely resellers and distributors. PEs are not interested in such companies. Venture funding was not present in this part of the world at that time—it first appeared in my horizon in 1999," he added.

The years 2007 and 2008 were the most difficult for Acronis, when it made about 10 acquisitions, and was confronted with budget problems due to cash flow miscalculations, even as the company began losing market share to competition. The conflict over the proposed listing with minority investors who had preferred shares lead to a legal and technical stalemate that saw Beloussov leave Acronis.

After leaving Acronis, Beloussov enjoyed a successful career in the venture capital space. In 2012, the VC firm he co-founded, Runa Capital, raised $135 million as part of its first fund. Its portfolio includes about 30 companies along with another five seed stage companies and the fund has incubated companies with more than $10 billion in assets, according to a presentation to investors.

Runa Capital’s largest investment was a $10 million Series C funding round of Acumatica on November, 2013. Its investments announced to date include MightyCall, Nginx, Talkbits, Jelastic, Metabar, Travelmenu, BigTime® Software, ECwid StopTheHacker, Capptain, B2B-Center, LinguaLeo, Dnevnik.ru.

Currently, Runa Capital is raising its second fund, a $300 million vehicle that will be focus on European, North American and Asian tech companies.

He is also the founder and partner with Quantum Wave Fund, a $100 million fund, venture capital for quantum physicists. Launched in 2012, this fund focuses on companies dealing with data transmission networks, new materials with superior properties, optical sub-micron transistors, high-frequency optical electronics, new systems for ultrasensitive imaging of the brain, and compact and accurate clocks for navigation systems.

Beloussov is also part of PhysTech Ventures, a $30 million VC fund that supports early-stage startups from his alma mater, the Moscow Institute of Physics and Technology.

After returning to Acronis, his primary tasks included changing the company’s product strategy, product names and pricing, as well as coming up with a new partner strategy and geographical focus.

Over the last 12 months, Acronis has made major changes and put in place new business processes and product development teams, in addition to making two acquisitions recently.

It has also launched several new products, all centred around the premise of protecting data for its clients and consumers.

Edited excerpts from an interview:

What made Acronis choose Singapore as its global headquarters? Will you set up a research and development (R&D) centre in Singapore?

It is a convenient city and we can afford it. But let me be very specific—Singapore is a large opportunity as 50% of the world’s population is around Singapore, 50% of the global sales will come from the regions around Singapore in the future, it offers good connectivity and infrastructure, it is politically neutral, expatriates are welcome, it has focus on technology.

Yes, we do hope to have an R&D centre here, but that relates to grants—we are talking to the government here. We are looking at a 50-100 people R&D centre; but for us, that is a large number. In order for us to be globally competitive, we need the top talent to win—top talent is welcome almost anywhere in the world, including Singapore. Today, success is about your knowledge and talent, and not about your wealth, your relatives, your power, and every government understands that. So it has not been difficult for us to bring in people to Singapore.

You have experienced both the Soviet Union days and the systems that came after the fall in communism? It is often said that the Soviet Union had the best software engineers, many of who then migrated to the US, to build its tech companies. Is this perception correct?

The word “best" is very convoluted—Russia was one of the two countries in the world at the time that was manufacturing platforms—software, solutions and applications platforms.

The reality is that today the platforms are only built by the Americans—there is no other county that makes them, and every software platform that we use is built by them—Microsoft, Apple, Google, and now Facebook is becoming a platform—Oracle, Cisco and IBM. In the 1980s and 1990s, there was another country that was making platforms—the Soviet Union.

This was also the reason for the success in my first company—in 1991, there were almost no American platforms and local platforms were dying out. The reason for the success for Sunrise was in 1990, there were 10,000 IBM PCs selling in Russia, and in 1994, it was two million—there was a huge growth.

In the 1990s, there was a Russian operating system—there were a lot of engineers in Russia who were trained and experienced in doing this work. They could set up Russian servers, domestic mainframe for super computers, for Russian database systems, Russian networks, Russian VPN (virtual private networks)… There were people with deep expertise—it is not the same when you compare with other countries like even India. India has a lot of good software engineers, but there are no platforms that are built in India

Probably, Russia had the same number of people with IT expertise as the US at that time.

Expertise like this is not achieved very quickly, but over time because it is culture, and people participate in many projects and convey their expertise to others, who, in turn, work on new projects—that was the expertise that was present uniquely in Russia and the US at that time.

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