YURIKA! – The Billionaire With The Secret Spreadsheet

Yuri Milner, who has made a fortune by making big bets on tech companies like FB, Twitter and WhatsApp, spoke to TOI’s Samidha Sharma in Silicon Valley in a rare interaction on why he’s bullish on India. Meet the Russian who has chosen research over roulette
Russian billio naire investor Yu ri Milner has in vited select Indi an investors, entr epreneurs and scientists for a private screening in Bengaluru on Thursday of a documentary film about alien life. The objective appears to be to gather support for his ambitious $100-million project -Breakthrough Listen -to discover whether intelligent life exists outside planet Earth.“Julia (Milner’s wife) and I would like to invite you and a guest for a dinner and a private screening of the documentary “Are We Alone? Alien Planets Revealed“. The film is dedicated to the Kepler Mission Telescope, NASA ‘s successful and ongoing project to search for Earth-like planets in the Milky Way ,“ the mail to invitees says. Rahul Mehta, partner at DST Global based in Dubai, has personally called up many VCs on Milner’s behalf for the Thursday event, which will include dinner. One source told TOI that the event is expected to have 150 guests. A number of VC investors told TOI that they had received invites.

Milner, who runs DST Global, which has invested in companies like Flipkart and Ola, has been meeting entrepreneurs and investors on his three-day visit to the city. One source told TOI that not all his meetings with entrepreneurs are about investment. On Wednesday , he met healthcare startup Perfint, a firm that is developing robotic technologies for invasive surgery procedures for cancer.

Bengaluru-based healthcare startup Practo is set to announce a fund-raise on Thursday -a round in which Milner is also making a personal investment. It was in 2011 when Yuri Milner, the physicist-turned-tech inves tor, first flew into India sensing a huge opportunity around in ternet in a country with a rap idly rising smartphone-toting population. He met a clutch of fastgrowing internet companies -online directory platform JustDial, among others -but none of those discussions fructified into investments. It took the 53-year-old another three years to lay his first bet in the country when Milner’s fund DST Global (which started life as Digital Sky Technologies) led a $210-million financing round in ecommerce major Flipkart. However, Milner’s ascent to the position of one of Silicon Valley’s most successful investors, despite being a rank outsider, has been far quicker.


The Russian billionaire’s portfolio includes four companies -Facebook, Alibaba, JD.com and Xiaomi -which are said to have returned DST profits of a billion dollars or more individually, in just over six years since Milner’s now legendary $200-million punt on Facebook in 2009.

Circle back to 2015: Milner’s belief in India producing several multi-billion-dollar internet companies has only become stronger since that first trip four years ago when he came armed with a suitcase full of tuna. Like many foreign travellers apprehensive of the fiery Indian curry , Milner’s wife, Julia, a former-fashion model and a contemporary artist, packed the cans only to discover some delectable Indian cuisine on their arrival.


Though India now figures regularly on the itinerary of the jetsetter, he’s never brought the tuna back, he tells me when we meet at the Rosewood hotel on Menlo Park’s Sand Hill Road, the epicentre of the venture capital universe (this is where they are funding disruptions in the way we live and love, commute and communicate).Some of these investors were his biggest doubters when the Russian outsider first struck the Facebook deal.He valued the social networking site at $10 billion, a huge premium compared to what other investors had to offer. DST has since clocked a stupendous 24 times return on the $1 billion of capital that it ploughed across five years in FB. Recently , Marc Andresseen, the founder of Netscape who now runs one of the most sought-after venture funds in the world Andresseen Horowitz, was quoted in Fortune magazine as saying that Milner was called a crazy Russian with dumb money dur ing the time. A sentiment echoed by many in the initial years when the man with the deep pockets was seen as having bought his way into the best social media companies in the Valley .

Things are different now. Today, Milner, whose net worth is pegged at $3.3 billion by Forbes, is known to have many close friends like Andresseen in Silicon Valley’s clubby and insulated tech world. He throws lavish parties attended by superstar founders at his $100-million Los Altos Hills mansion -a perfect place for entrepreneurs from across the world to network with the Valley’s well-heeled.

“Yuri’s advantage at the time was that he and his team had done an incredibly sophisticated analysis. What they’d basically done is watch the development of consumer internet business models since 2000 outside of the US, so they had these spreadsheets that were literally across 40 countries,“ Andresseen, who had a ringside seat to Milner’s meteoric rise as he was on the Facebook board, has been quoted as saying.

These secret spreadsheets combined with exhaustive research and long periods spent on diligence of companies are at the core of Milner’s investment theory. Something that made him look to India after having stitched together bigticket deals in the US and China.


Even as Milner went back after his visit in 2011, Rahul Mehta, a former Goldman Sachs banker who is now a managing partner at the fund, kept meeting Indian startups over the next two-three years before DST zoomed in on Flipkart. Now, Milner has not only grown to like Indian food but has bulked up his India portfolio. A few months after investing in Flipkart, in the middle of 2014, he personally put a few million dollars in taxi aggregator service Ola which he topped up earlier this year when DST led a $400-million round in the cab startup. This catapulted Ola into the big league, valuing it at $2.5 billion.

“Flipkart and Ola are following a promising trajectory . When we invest in a company , they have to grow 10-20 times for them to become really sig nificant. I think that a few years ago, Silicon Valley did not have any competition for talent and capital but now Asian and European countries are coming up very strongly . You see backward repatriation of talent taking place which is why capital is following talent and opportunity,“ the athleticlooking Milner, dressed casually in a full-sleeved t-shirt, tells me in an unmistakable Russian accent.

While Milner’s knack for homing in on multi-billion tech companies is wellestablished, he and his team are also adept at spotting promising early-stage startups. This helps them build relationships early on with companies.While some of these work, others remain as experiments -typical of early-stage investing. Like the bet they took on the now-controversial realty portal Housing.com, which never received DST’s follow-on in vestment. And not invest ing in Uber having come in early as a personal investor, which Milner has admitted was a mistake he has learnt from.

Some of his other personal investments, which range from $1-5 million, in India include hyperlocal delivery venture Grofers, healthcare tech star tup Practo, and Swiggy, a food delivery platform based in Bengaluru. All of these are aimed to map progress of what, according to Milner, could potentially become big businesses and future DST investment targets.

Another criterion is that businesses which are short of a $500-million valuation do not qualify for investments from the fund. Milner is clear he doesn’t lead early-stage rounds. “We don’t want to compete with VCs. DST comes in at later stages, a niche we’ve carved out for the fund,“ he says.

“Our investments are based on thorough research and building relationships with companies before they become significant. So it works in this order ­ we tap into our sources, build relationships and prepare spreadsheets. Our strategy is our big spreadsheet, based on what we see around the world.“ Once these spreadsheets are prepared by a team of ex-Goldman Sachs investment bankers, largely based at DST’s headquarters in Hong Kong, the focus shifts to founders.


Sachin Bansal, co-founder & CEO of Flipkart, says Milner comes across as someone who invests only if he believes in the founder’s vision of the company . Recounting a video conference chat with him before the DST investment, Bansal says, “Knowing very well that I’d love to have him as an investor, I asked him why Flipkart should get DST on board. `Because we bring luck,’ responded Milner.“

Over a year ago when this round got done, Flipkart was valued at around $2 billion; its current valuation is $15 billion. All told, DST has pumped as much as $275 million in the e-commerce firm as its valuation has soared seven times.

“We delve into a lot of numbers, but I think the founder is very important.It boils down to the founder, and his or her ambition. In many ways, it’s pure psychology . I was a founder myself, and I think sometimes it’s hard to appreciate how difficult it is and what it means to have a daily battle where the world is against you.“ That explains DST’s founder-friendly terms, says Milner.

An example of that is DST’s philosophy of not taking board seats in the companies that they invest in; there is almost negligible operational control and no day-to-day involvement.Milner is also known for crafting what’s called DST-type deals ­ a model wherein the fund provides liquidity to founders, employees and early investors through a mix transaction of primary and secondary sale of shares.While founders hail this investment formula, many competitor funds say these terms give DST an easy access to hot companies.

Bhavish Agarwal, co-founder & CEO of Ola, says Milner is a very passive investor with a deep understanding of tech and internet. “His network in Silicon Valley is a great asset for founders along with his big picture, macro views on emerging trends in technology . They are very supportive of fast-growing companies because they understand turning in profits comes later, it’s about gaining scale at this stage,“ he says.


Six years into running DST Global in its present avatar, Milner has in many ways reordered the ways of tech investing around the world, but his fund is still seen as a one-man show. He disagrees. “When people say that, they compare DST to other established funds which have been around for 25 years. That is not a fair comparison.First of all, DST is a team effort. Second, DST is a startup; it is probably the same age as a Flipkart which is also dependent on the team of founders just like Facebook and even Google are.The institutionalization of an organization takes time. DST’s culture was created by me as much as by the team,“ says Milner. The goal: to continue building the institution.

Source: The Times of India



Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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