The anonymous chat app AntiChat, developed in Latvia by Ņikita Haļavins, has gained a lot of acclaim since it took off two years ago – there are versions available for iOS and Android telephones, over a million active users a month, and downloads from 70% of all countries in the world! Vjačeslavs Ņebogatihs, an investor in the project, tells us about the success story of AntiChat, his investor experience, and startup environment in Latvia.
Since 2007, Vjačeslavs Ņebogatihs is the CEO at the high-tech company Bajtel.lv, which offers three main product lines on the market: portable navigation devices, smartphones and IT products.Vjačeslavs grew interested in new business development and income diversification opportunities, and became a member of the Latvian Business Angel Network (LatBAN). The businessmen regularly attends various fairs and investor events to accumulate new experience and draw inspiration for development of new products in Latvia. He admits that he has had all kinds of experiences for the past three years, but that did help him improve the businesses he had started.
How long have you been involved in the project, and why did you choose this particular project?
AntiChat marked its second year in business this past April. I have been involved in the company almost since the very beginning, and it was largely by happenstance. I have known Ņikita, the author of the project, for more than three years already, I have been following his projects and achievements. When I became a member of the Latvian Business Angel Network (LatBAN), I learned that Ņikita had a project that he later presented at an investment session. It was a very captivating presentation. I realized it could be a very interesting project for a number of reasons: the author was an excellent and very knowledgeable professional, and the main idea of the project was of great current interest. The talks with Ņikita continued for about five months until we reached agreement. Two investors have invested in the project. I invested EUR 50,000.
What else was important to you as an investor looking at different projects?
The team is also very important. Even if the AntiChat project was originally developed by just one person. Of course, that also entailed some risk. But Ņikita is so knowledgeable and professional that he alone was worth a solid team. So, the team, the idea, and the strategy are the main factors that I, as an investor, use in judging other projects. It’s also important to me that I can contribute with my knowledge to a project. These days people invest the so-called smart money, or money with added value. To AntiChat, I have contributed both. It is my advice and contacts that the project needed the most to develop. I am running several business projects in Eastern Europe, which is why I took charge of popularizing AntiChat on that market. But right now, over 50% of product users are English-speakers in the United States, Canada, Great Britain and Australia, so now we’re investing the most in expansion on these markets. My involvement in generating publicity there is very minimal. But my knowledge will still be put to good use as we have future plans where my business experience will be necessary.
What’s your opinion about what has been achieved thus far?
I’m very pleased. Two years have passed, and the project is still developing as steadily as at the beginning. Right now the app has more than a million active monthly users. It has been downloaded in 70% of all countries in the world. Our focus is currently on the United States, China and Latin America, less so on Eastern Europe. The project reached break-even point at the end of 2016. We have found a niche where people are ready to pay, and that generates substantial revenue for us. All that, though, is just the beginning. We are negotiating with prospective investors and partners in the United States as there’s still very much to do. Therefore I definitely believe that the project has a great potential.
How do you find new opportunities for project development?
Ņikita takes a sociological perspective on the project. He wishes to change society’s perception and how people communicate. Ņikita uses the application himself, and actively reacts to users’ recommendations. This application is not just to make money – money is rather a confirmation that we’re on the right track. We hold regular meetings and discuss what needs to be changed. For example, right now we’re thinking of ways to make the product downloadable for computer users. I asked a year ago why we had not yet done that, but I was presented with very compelling reasons why it was not important to our clients. Now, however, we have reached the point where a computer version is necessary after all. The project is indeed constantly developing and changing. You have to be able to promptly react to innovations.
What are your future plans?
At the moment, the team is made up of three persons who work on technical support, and over 70 moderators who are part of the day-to-day work. In the near future, we are planning to increase the developers’ team in Latvia, and move the best employees to our head offices in Silicon Valley. During some stages in project development, we also sourced services in the United States. That was very valuable experience. Until this fall, we are planning to put our relations with prospective partners and investors in order, so the next stage of investment in the project could commence.
You have been a member of LatBAN since the organization was founded. What do you think of investors’ attitudes and the private investment environment in Latvia?
This environment is changing and developing at a very fast pace. Initially there were people coming to LatBAN who did not really understand the startup environment and had no relevant experience. Now the organization is doing active work to attract new investors. Investment sessions are organized on a monthly basis. Some projects, which have already received investments, return to LatBAN again. There is more interest from the media, therefore the startup environment is becoming more transparent and easier for people to understand. This is proved by the establishment of the first syndicate. We will also definitely attempt to attract state co-financing to make things more interesting for everyone. If the result is positive, more syndicates will be formed.
Given the rather extensive experience of working with startups you have accumulated by now, what would you recommend them – where and how should they seek investors?
First of all, they have to try to show their project from as many angles as possible. The more the project is pitched, while work is continuing on furthering the project, the more prominent it will be, and the more likely it will attract investors’ attention. The most important thing is to actively popularize the project, have trust in it, and a little financing. There are a lot of opportunities these days, for instance, accelerators. That’s an entire industry that helps startups reach the next development stage.
Has the quality of startup projects improved?
Here, too, development can be observed. Initially all projects were very mundane, with no business idea and no vision. Certainly, there also were good projects, but not a lot of them. Now the industry is developing, and projects have become more professional. Unfortunately, the number of projects is not as high as one might wish. I hope that in the future, increasingly more young people will want to get involved and do everything in their power to attain their dreams and implement their ideas.