French excluded from membership of Russian IT company “Brand Quad”

According to the Unified State Register of Legal Entities, the share of the Brandquad structure, registered in France, in the capital of the Russian legal entity Brand Quad LLC decreased on September 12 from 70% to 35%, and on September 19 the company completely withdrew from the Russian LLC.

On September 12, the founders returned to the shareholders of Brand Quad LLC, in particular, Philip Denisov received 17.18%, Konstantin Shishkin – 14.68%, from MM-Trust LLC (Anatoly Mitroshin, Vladimir and Maria Zotov, invested in the startup in 2019) – 7.91%. On September 19, the LLC itself became the owner of 35%. According to Russian legislation, the company must dispose of this share within a year. According to the results of the transactions, Fria Invest’s share decreased from 30% to 25.23%.

Co-founder and CEO of Brand Quad Filipp Denisov commented on the deal.

“In September, we actually restructured the company and, if at the beginning of the year 100% of Brand Quad LLC belonged to Brandquad (France), now the shares are distributed among the founders: Konstantin Shishkin, me and our investors Frii Invest. LLC, LLC “MM-trust,” Denisov explained to RB.RU.

According to the co-founder, the restructuring will allow for further separation of divisions in different countries and the software developed by the company will now be in Russian.

“Our Russian clients, which is very important in today’s realities, have the advantage of using domestic IT products: the PIM system is Brandquad’s flagship product for storing product data and displaying it on an electronic shelf, DSA is a product analysis system in e-commerce,” Denisov said.

Denisov added that now the company is introducing a fundamentally new product to the market – Mediaquad, a system for collaborative work with digital media assets not only in e-commerce, but also in other industries, for example, construction, real estate, hospitality, and many others.

“The goal is ambitious: to occupy at least 30% of the market for automation of work with digital media assets in the next two years,” said the CEO.

• The Brandquad structure registered in France received 100% of the startup in 2021, six months later it became known that it had raised 2.5 million euros from Skolkovo Ventures (SK Capital) and the French bank BPI France for development abroad and the opening of an R&D center in Lille, France. The first investor invested 1.5 million euros and the second – 1 million euros.
• Forbes then wrote that Brandquad is a holding company of two legal entities: Russian and French. The funds from both investors were raised by the French division and were to be distributed for the development of the entire holding company, the publication reports. As RB.RU wrote, the shares of the founders of Brand Quad LLC were exchanged for shares of the French Brandquad. For example, as of April 1, 2024, Frii Invest LLC, which first invested in the company in 2018, owned 56,458 shares of the French company, which in turn owned a Russian legal entity.
• In 2024, following the introduction of sanctions, Skolkovo Ventures sued Brandquad demanding the return of investments. The Russian legal entity paid the venture capitalist 187 million rubles in June. Prior to payment, Frii Invest LLC received 30% of the company, and Brandquad’s share was reduced to 70%. May 31 Kirill Varlamov, CEO of the fund He told RBC that the company had invested 150 million rubles in Brandquad, without specifying the destination of the funds or the investment mechanism.

According Arseniy Dabbakh, founder of DsightThe changes in the ownership structure of the company are associated with sanctions. The expert suggested that the transaction is of a technical nature, so the cost does not matter. If we are talking about a forced transaction, then the company can be valued at two revenues – about 400 million rubles, the expert added.

Freedom Finance Global Analysts The company is valued at 450 million rubles, based on taxes paid by 2023.

“The company is not public and does not disclose financial indicators according to IFRS. According to the Russian accounting report, in 2023 it suffered losses in the amount of 136 million rubles. However, taking into account the taxes paid during the same period, its approximate cost may be 450 million rubles. It is worth noting that this estimate is very conditional and is probably overestimated,” Freedom Finance Global explained.

Leonid Delitsyn, analyst at Finam financial group He added that sanctions have delayed the acceleration of the company’s growth through work in Western markets.

“In such a situation, adapting companies sometimes split up, for example, instead of one Yandex, two appeared, one of which became Nebius,” the expert believes. According to Delitsyn, the Russian market in which the startup operates is very promising, judging by the pace of growth of the markets, but the company does not show either rapid growth or profit.

“It needs to start a new life, and now it can be valued ten times cheaper – one or two annual revenues,” the expert believes. Delitsyn recalled that when attracting investments in 2021, investors expected that in two or three years the company would be worth 2.5 billion rubles, but this did not happen.

Founder of IT integrator AWG Alexander Khachiyan He believes that the main disadvantage of losing a French company among the participants is that it loses opportunities on the international market. According to the expert, the company had regular customers and excellent prospects for conquering the world market.

“Without the support of the French partner, they simply lose these opportunities. If they continue with their plans to expand into the international market, they will need to look for a new partner to push forward projects,” the specialist believes.

• In 2019, Brandquad raised 187.5 million rubles from business angel Anatoly Mitroshin and the fund.

• In 2018, the startup attracted seed funding from Fria in the amount of 16 million rubles, RB.RU wrote. At that time, the platform worked with 32 manufacturers and retailers, including L’oreal, Unilever, Nestlé, Procter & Gamble, Johnson & Johnson, Henkel, Hasbro, Bayer, Stada, some of which left the Russian market after the start of SVO or reduced investment in marketing.

After the publication of the article, Denisov clarified to RB.RU that the changes in the ownership structure of the company have nothing to do with the sanctions. According to the co-founder, formally there was only one division of assets: the Russian company operates in the Russian market, the French company in the European market, and the clients remain clients in both markets. According to Denisov, this is very positive news for the company, as the different divisions no longer influence each other’s work. The French structure of Brandquad will continue to function as one division, the businessman added.