Alexey Posternak is the CFO at MTS AI and plans to invest $100m in artificial intelligence startups using the new venture fund.
Russia’s biggest mobile phone carrier MTS plans to create a $100-million venture fund and accelerator for startups.
MTSAI Center plans to invest from the late seed up to series A startups. The center has already invested $10M in a Taiwanese developer of AI microchips. The Moscow-based fund is also willing to invest up to $100,000 in startups through its accelerator program.
Russian telecoms operator Nvidia follows Nvidia’s launch of its AI startup accelerator in 2016 and Google, Microsoft, Toyota, and Baidu in launching venture capital funds, emphasizing artificial intelligence.
The MTS AI Intima fund’s launch comes amid a surge of investment in AI-focused startups with over $55 billion committed to the sector in 2020 alone, according to date from Pitchbook. Alexey Pasternak, MTS AI’s CFO, stated that the surge in investment led to “overinvestment” in some AI startups, while specialist projects could not raise capital from generalist VC funds.
Posternak states, “We are closing that gap by having deep technical expertise and being able to understand and evaluate projects from the earliest stage.” “There are many significant funds out there, but most of them are generalists with little expertise in any specific industry.
Posternak stated that the fund and accelerator would concentrate on AI startups working on image, behavior, and language analytics. It would also avoid areas like autonomous vehicles, where investors have made significant investments. “Many, Many Companies are already working on it, so it’s not too late to enter that market segment,” Posternak says.
The fund has also already made its first investment of $10 million in March in Taiwanese startup Kneron, making AI microchips used to control internet-connected cameras and other devices. Foxconn, Qualcomm, and Li Ka-Shing’s Horizon Ventures have invested in the startup that has raised over $90 million from financers to date, according to data from Pitchbook.
Posternak said that MTS AI had a team of developers who were working on AI-powered chatbots. They also developed voice and text bots to assist call centers and possibly controversial machine vision tools for business. “These video analytic tools they can understand the profile of a person that is entering the room, and understand his behavioral characteristics…that could be sold to any number of segments in several industries starting from manufacturing and then with retail,” says Posternak.
The Russian wireless carrier has a joint listing on the New York Stock Exchange and Moscow Exchange controlled by Russian billionaire Vladimir Yevtushenkov’s Sistema conglomerate. MTS paid $850 million in March 2019 to settle a federal bribery charge with the U.S. Securities and Exchange Commission overpayments made to an Uzbek official.