70% of start-ups already use AI in their solutions


The Sber start-up ecosystem fosters tech innovations among school students, entrepreneurs, and everyone in between

Natalia Magidey, managing director working with start-ups, Sber

The finals of Sber500, Sber’s international seed accelerator for tech start-ups, were held in late September, gathering teams from Russia, Turkey and India. They presented their projects and attracted investors. In the three hours that the event lasted, they received eight investment proposals worth RUB 240 mn, and eight more investors agreed to run due diligence, which is usually followed by outlining the terms of the deal. Putting this in context, a total of 14 deals were concluded in Russia in 1Q23, a Dsight report says.
– Could you tell us about the seed accelerator? Does it manage to stay international in the current environment?
– Sber500 is our flagship seed accelerator for start-ups that have passed the so-called “valley of death”, are well-off standing on their feet and seeking for new clients in Russia or entering foreign markets.

The main objective of the program is to bring the expertise of more experienced countries to the Russian venture capital market. As we started this project in 2018, we made an informed decision to pursue this model and are sticking to it now. There is no point in teaching what entrepreneurs can learn themselves while they are here. We need to help Russian entrepreneurs avoid the mistakes their foreign counterparts made.

This season, mentors from more than a dozen countries have worked with start-ups, sharing their accumulated expertise for 15 weeks. This will save time on the development of start-up solutions and position our students’ projects to evolve at an accelerated pace. While doing this, many students reconsidered their business approaches, and their revenue grew by a factor of 2.5 on average.

As for the international status, the latest Sber500 batch showed a record international coverage as 1,250 start-ups from 36 countries (20% of foreign applications) submitted their entries, which shows that many entrepreneurs still view Russia as a major player in the market for innovations.
– Why are you attracting international start-ups and what formats does Sber use to work with graduates?
– We look at foreign start-ups along with domestic ones as suppliers of innovation. It’s a market approach: if you need a technology, and you can’t find it in the local market, you look elsewhere. Sber500 has a goal of being ahead of the curve, and foreign start-ups experienced in interacting with another market often have something that we don’t. We are always open to synergies with other countries, and start-ups respond.

Partnerships may have different forms. The most common is engaging a start-up as a contractor. In this case, its solution optimizes a current Sber product or helps create a new one. Much more rarely, the solution is bought outright. This happens when a start-up meets one of Sber’s needs, we have massive plans for it, or we seek exclusivity in the use of the start-up’s solution. The exact scenario for a particular project is always very individual. The decision is made after both the Sber team and the start-up team have considered all the pros and cons.

However, the accelerator positions graduates to cooperate outside Sber, too. Before the end of the program, we introduce participants to more than 30 partner corporations and 40 investors so that the parties can agree on partnerships and deals. This approach is bearing fruit as105 graduates from previous batches have signed more than 7,000 contracts with Sber and other companies and raised more than RUB 3 bn from investors around the world. The idea behind this approach is to give access to the technology we find to all players in the innovation market, and we see that good solutions with a deep understanding of the consumer needs remain in demand even during the venture winter.
– Oh, yes. The whole world is talking about the venture winter these days. How does it feel at Sber?
– It used to seem that “a teenager” and “entrepreneurship” could not go hand in hand. But it turns out that this is not the case: high school and college students often do incredible things that seem impossible to adults, because adults already have their own mindsets and limitations. When we ask teenagers how they were able to do it, since it had been deemed impossible, they say that they had not thought it was impossible in the first place, so they treated it as something ordinary.

They are open to new things and have been gadget-friendly since their childhood. They have a different outlook on the digital realm, so they know better what will trend, what a specific product will be like: they are its future users. Also, children do not have the information noise and infoxication as adults do, and they are able to pick out the most important things thanks to their natural focus. That is why they sometimes find and realize solutions that make you think: “Wow, how simple! It was on the surface – why haven’t we come up with it ourselves?”

We are seeing these guys’ great potential, which is why we work on two free programs for teenagers. The first one – a seed accelerator for school children, vocational school students, and undergraduates – teaches them how to find – or, should I say, how to spot – an idea, create and advance a tech product with this idea at the core, and helps talented children get into college.

For instance, one of the graduate teams of school children constructed smart carts for supermarkets capable of identifying groceries you put in them with machine vision and following buyers when they shop. A pilot of this solution is now being discussed with a major retailer. By winning the accelerator, these guys also made it to HSE without exams.

The second initiative is a seed accelerator for undergraduates, postgraduates, researchers and university fellows. Last year’s winner, a 21-year-old RUDN Medical School student, and his team are developing a technology to treat atherosclerosis with nanobots. The nanobots are injected through the radial artery into your bloodstream and, with the help of a magnetic field, are driven to a cholesterol plaque. There, the bots release a drug that dissolves the plaque, with the fat removed from the body through the bloodstream along with the microparticles of the nanobots. This minimally invasive procedure may become an alternative to surgery and long-term drug treatment.
– What are the most called-for start-ups these days in your opinion?
– We want all tech start-ups, no exceptions. The key thing here is for them to meet a consumer need. At Sber, we pay special attention to AI, DeFI, and metaverse projects.

Seventy percent of the finalists in Sber500’s fourth batch already use AI in their solutions. And there is a reason for that, too. We pay special attention to these start-ups, since our experience suggests that AI drives the efficiency of operations by a factor of 5–7. AI adoption at Sber yielded RUB 235 bn in 2022.

Russia has always been abundant in talents, capable of realizing their potential, making money, creating high-paying jobs, and ensuring the country’s prosperity. They simply need to see how it’s done, what they need to learn, and who to talk to. This is exactly what we do.