Most of the funds were invested by FIBR Technologies SA, which is owned by the ABH Holdings holding of Russian billionaires Mikhail Fridman and Petr Aven. In 2022, the founders bought a stake from the company for a nominal £10m, according to a source familiar with the terms of the deal. The company has already raised a new round of funding and plans to turn the project into a landmark for the British market.
In a conversation with Forbes, entrepreneurs Boris Dyakonov and Eduard Panteleev jokingly call each other Ilf and Petrov and the Strugatsky brothers in the financial sector. They met in 2008 and have since built several successful businesses in Russia, including the Tochka online bank. Now they intend to repeat their success in the UK, where they have been developing the fintech startup Anna Money since 2017. More than 150,000 people already use the service and generated £10m in revenue in 2022.
The phenomenon of Yekaterinburg
Boris Dyakonov and Eduard Panteleev met in 2008 in Yekaterinburg, where Eduard came to buy the Ural bank Severnaya Kazna. At that time, he held the position of vice president of Probusinessbank and actively bought up regional banks, thus expanding the geography of the structure. The deal was at the final stage, but unexpectedly fell through – the management of the “Northern Treasury” preferred partnership with Alfa-Bank. Frustrated, Panteleev was driving around Yekaterinburg with a colleague when he suggested that he look into Bank24. The time was approaching midnight, but they found Boris Dyakonov, co-owner of the company, in the office. He was skeptical about the idea of partnership, but the next morning he called and offered to discuss it.
Panteleev recalls that by that time the bank had been seriously affected by the 2008 crisis and was “lying on its side”: “It was a dead bank that was generating losses.” Although it did not differ much from other regional players, it had a zest – some of the clients were served remotely, which was unusual for that time. Another feature was the audience – its main clients were representatives of small and medium-sized businesses. “It was possible to build something around this,” the entrepreneur recalls. After lengthy negotiations, the Life banking Group, which included Probusinessbank, bought out a controlling stake in the Bank24. She took him to recuperation, which ended in 2011.
Shortly before this, Panteleev decided to leave the group and launch a new business – the investment fund Catalytic People in Cyprus. Its capital included the shareholders of Probusinessbank – East Capital, RenFin, Blue Crest and Argo Group. They received a total of 48% of the company. Panteleev shared another 52% with Sergei Leontiev, Alexander Zheleznyak and Eldar Bikmaev, also beneficiaries of the structure, each received 13%. The entrepreneur entered into an option agreement with Leontyev and Zheleznyak, according to which they could exchange their shares in the fund for his shares in Probusinessbank. It was 5.37%. Another condition of the deal was the buyout of Bank24 Catalytic People.
It was possible to fulfill the option agreement only in 2014, when the Central Bank revoked the license from the “twenty-four” and the asset was “not needed by the group,” recalls Panteleev. He also bought shares of the funds, pledging to pay them back over the next two years. According to a source familiar with the terms of the deal, its amount was about € 20 million. At the same time, Bikmaev left the capital of Catalytic People, selling his stake to Panteleev “at par value.” Subsequently, Dyakonov received half of the fund.
Panteleev recalls that by 2014 the G20 had become a “phenomenon”. At that time, she had over 35,000 active clients. These people loved the bank, sent petitions to the Central Bank in its defense, brought flowers to employees, adds Dyakonov. To save the project after the license was revoked, the friends began to look for a potential partner who could restart it under a new brand. The purchase of assets was considered by several Russian banks, but the best offer in terms of the autonomy of the team was made by the Otkritie financial group. In 2015, the Tochka online bank was opened on the basis of a credit institution. 400 employees of the Bank24 moved there.
Panteleev clarifies that according to the results of the Otkritie transaction, the twenty-four legal entity did not receive – BANK24.RU OJSC still exists and is at the stage of liquidation, follows from the SPARK database. Tochka was launched from scratch using the technologies of its predecessor. Dyakonov and Panteleev worked as contractors, and received a fee for their work, which helped pay off the installments to the funds – the former shareholders of Catalytic People. Later, they were to receive 15% of the bank’s profits. But they exchanged this opportunity for 9.99% in the Tochka legal entity, which appeared in 2019. At the same time, in addition to the Cypriot structure of Panteleev and Dyakonov, the Otkritie group and the Qiwi payment system received shares in the bank. They became owners of 50% and 40% respectively.
Bank Assistant
In parallel with the development of the Russian Tochka, the partners began to explore the international market. This was prompted by a case. In 2014, at the height of the crisis at Bank24, John Kemble, a representative of the South African Standard Bank, wrote to Dyakonov. He wanted to launch an analogue of the “twenty-four” in South Africa. It turned out that his wife was from Yekaterinburg and warmly recalled the bank she used when she lived in Russia. The following year, Panteleev, Dyakonov, Kemble and a number of other South African entrepreneurs developed the concept. Cooperation did not work out. But the project brought the buddies together with a new potential partner who was willing to invest in a UK launch.
This partnership has not moved off the ground either. But the country is interested in entrepreneurs. According to their observations, local banking lagged behind the Russian one in terms of the degree of digitalization. According to Alexandra Zotova, venture partner at Ruvento Ventures in Singapore, by the mid-2010s, British fintech was already actively developing. Then there were neobanks Starling Bank, Monzo, Revolut, service for entrepreneurs Tide and others. Ivan Maryasin, co-founder of the German fintech startup Monite, agrees with this. They actively attracted investments, which made the market promising.
In 2017, the partners began to assemble a team for a British project. To do this, Dyakonov published a post on Facebook (owned by Meta, recognized as extremist and banned in Russia). Vyacheslav Akulov, ex-Director for Product Services at Alfa-Bank, and Nikita Filippov, former top manager of Octoberry application developer and Magneta.ai customer support chat, responded to it. Later, they were joined by Filippov’s Magneta.ai partner Andrei Pachai, as well as British designer Daljit Singh. All of them became co-owners of the startup. At first, the founders lived in several countries and worked on the project in their free time. But gradually they settled in London and focused on a new business.
Entrepreneurs planned to create an automated banking assistant for small and medium-sized businesses. The first version of the application was developed by the team of Filippov and Pachay – they had the appropriate expertise thanks to Magneta.ai, says Akulov. The development took about a year and required £4.5 million, of which Panteleev invested £1.5 million. Another £3 million was added by investor William Potts, chief executive officer of the Luxembourg-based venture capital fund Houghton Lane.
The application launched in beta mode in April 2018 and was named Anna – Absolutely No Nonsense Admin (Anna), which means “Admin without any nonsense” in English. It reflected the main mission of the team – to create a tool that would simplify the management of finances and taxes for British entrepreneurs. A chatbot worked inside the application. At the start, he opened business accounts and issued bank cards to clients. To do this, it was necessary to give the appropriate command. It was an innovative proposal for the UK market, says Nikolay Chichevatov, chief product manager of Yandex fintech services. Over time, Anna learned to recognize documents and details, calculate taxes and issue refunds to the client. The company did not have a banking license, so the partners were responsible for issuing cards. At first, the company worked with the German payment system Wirecard, but after its bankruptcy in 2020, it switched to the solutions of the British fintech startup Railsr (formerly Railsbank).
The first users of the application received services for free. In February 2019, the startup raised another £9 million from the investment company Kinetik, and in March completed testing and introduced a paid subscription to the application. It cost £11 a month. By May 2019, Anna Money was already used by 5,000 customers. The audience of the service grew by 50-60 users daily, the founders claimed. According to Chichevatov, the team focused on micro-businesses without employees and freelancers, which also became a hallmark of the project.
To attract customers, the team constantly came up with creative campaigns. For example, at the beginning of 2019, they released a “meowing card”: the application made sounds when the user used a contactless payment method. Panteleev recalls that in this way the service rebuilt itself from competitors with their “serious metal cards”: “We hoped that this would make users smile. And we succeeded.” Another experiment was crowdinvesting. In October 2019, the company launched a fundraising platform on the Seedrs platform. In a month, they managed to raise more than £3.5 million from 603 investors. “It was a great way to express yourself,” Dyakonov says.
Billionaires on board
In early 2020, the team planned to assemble a larger round. Panteleev, who was in charge of financing at the startup, discussed deals with a number of international investment funds. But at the beginning of the year, a pandemic began, and the venture capital market froze for a while. The company found itself in a difficult situation. “There was enough money until the fall,” the entrepreneur recalls. At the same time, representatives of the billionaire Mikhail Fridman turned to him. Even before that, he showed interest in a startup, but the founders rejected the proposals, says Panteleev. In light of new developments, the team decided to agree to the deal. According to Akulov, Fridman and his partner, billionaire Pyotr Aven, offered the most interesting conditions in terms of valuing the company and leaving the project for the founders. He did not disclose details.
In the spring of 2020, FIBR Technologies (a subsidiary of ABH Holdings of Russian billionaires Fridman and Aven) invested £17.5 million ($21 million) in Anna Money for 24% of the startup. Its valuation at the end of the round was $110 million. According to a source familiar with the terms of the deal, the structure also bought out the shares of all current investors for £36 million. Thus, the share of FIBR Technologies exceeded 60%. The team subsequently raised another round for £27m. It closed in 2021. According to a source close to the startup, £26.5 million of these funds were invested by FIBR, increasing its share to 74%.
With these funds, Anna Money planned to go beyond the UK. But in 2022, he faced a new problem. In February, the European Union imposed personal sanctions against Fridman and Aven. The startup did not fall under the sanctions, since the economic share of billionaires in it was 34%. They also had no control – for example, the right to appoint directors of the company. But with such investors on board, the team had no future, says Panteleev: “When you have [в капитале] there are sanctioned billionaires, they treat you badly [клиенты и партнеры]. Besides, they could not develop the project.”
In order to save the startup, in August 2022, Anna Money bought out FIBR’s stake with its own funds. The founders declined to disclose the amount of the deal. It could be at least £30 million (about $36.3 million), Bloomberg wrote, citing a source familiar with the conditions. Finam financial group analyst Leonid Delitsyn valued it at $38 million, based on a previously announced estimate of $110 million. According to a source close to the company, the stake was bought out for a nominal £10 million. cost, he said in a conversation with Forbes. Today, 45% of the shares are owned by Dyakonov and Panteleev, the remaining 10% are distributed between the team of founders and option holders. Representatives of ABH Holdings did not answer questions from Forbes.
Landmark project
Despite the difficulties, in 2022 the startup increased revenue to £10 million and reached operating break-even. It now has over 110 employees and 150,000 clients. Today, through a startup, you can get a card and link your bank accounts to it. The service allows you to manage expenses, issue invoices and send invoices. A monthly subscription will cost £14.9 or £49.9 depending on the set of services. The company is also developing a smartphone app and a web portal where entrepreneurs can calculate and pay taxes, do bookkeeping, and perform other business tasks.
Chichevatov says that the service is still inferior to competitors. According to his calculations, the largest fintech player in the UK today is Revolut. It occupies approximately 10% of the market with half a million customers. The leaders are also Starling Bank and Monzo, with approximately 350,000 and 250,000 SMEs respectively.
In addition, Anna Money has a narrower product line compared to other fintech projects. The company, for example, does not offer its own loans – only partner loans. Because of this, customers can flow to competing services that have such a service, says Chichevatov: “This can be offset by the fact that a startup works with freelancers and small businesses that do not grow and do not require loans. But here is the question of monetization: such clients earn little and use a small number of products, respectively, the income from them is also small.” Zotova agrees with this. She notes the startup’s strong and experienced team. But its future, according to the investor, depends on the volume of venture financing and the chosen strategy in the British market. Among the promising areas, she names credit solutions and accounting services.
The company has already raised a new round of financing – £18 million. Dyakonov and Panteleev invested most of it after the sale of the Catalytic People stake in Tochka Bank to the Filev family (owners of the S7 holding, which includes the airline of the same name). The parties closed the deal in February 2023. The team plans to obtain a banking license and create an ecosystem of services for small and medium-sized businesses. She also intends to bring the startup to profit before the end of 2024. “So far, Anna is a tiny project. But we plan to turn it into a landmark in the British market,” Panteleev concluded.
