iFarm founder plans to bankrupt Russian smart urban farm business

MTS II LLC is indicated as a creditor of City Greenhouses, and two other companies are the Inspectorate of the Federal Tax Service No. 15 for Moscow and the Inspectorate of the Federal Tax Service No. 22 for the Novosibirsk region, according to the EFRSB data. The companies have been in liquidation since November. Lyskovsky is its sole owner and liquidator.

• The City Greenhouses company offered in Russia turnkey smart urban vertical farms for local year-round cultivation of ultra-fresh greens, strawberries and vegetables, regardless of climate and soil quality, and software for greenhouses based on artificial intelligence.

Lyskovsky did not respond to RB.RU’s request at the time of this publication. “Winter, pandemic, wars – all this does not contribute to the growth of interest in this business,” Lyskovsky said in an interview with the YouTube channel “Technology in Faces” a year before announcing plans to bankrupt his Russian companies. The businessman also noted that he had “much less money than before.”

Until November 2022, Lyskovsky and his partners held assets through the US-registered startup iFarm. In 2019, it raised $1 million from venture fund Gagarin Capital and a group of investors, and in 2020 the company announced the closing of a $4 million investment round. The venture fund Gagarin Capital became the main investor. Matrix Capital, Impulse VC, imi.vc, businessman Boris Kim and several business angels also joined the agreement. The company planned to use the funds raised to develop its iFarm Growtune IT platform. iFarm’s ownership structure was not disclosed.

In 2022-2023, the American company abandoned the Russian business (but continued to participate in international projects), the shares were transferred to Lyskovsky. At the end of 2023, the total losses of three Russian LLCs exceeded 50 million rubles.

Investor opinion

As Mikhail Taver, founder and managing partner of Taver Capital (formerly Gagarin Capital Partners), explained to RB.RU, Lyskovsky refused to follow investors’ recommendations, which increased the risks for the business. “Preserving iFarm and supporting its team have always been my priorities. However, Alexander Lyskovsky was unable to fulfill his duties as CEO: his decisions worsened the company’s situation, and his refusal to follow the recommendations of investors and the board of directors increased the risks,” said Taver, whose statement was broadcast to RB.RU. by the representative of the investor.

Taver added that in November last year investors agreed that Lyskovsky would step down as CEO, transfer his shares in the company in favor of a set of options to motivate management and retain his seat on the board of directors.

“He himself expressed these agreements and recorded them in the town hall chat, but subsequently refused to formalize them legally, aggravating the company’s crisis. I left the board because I am not prepared to take responsibility for Alexander’s actions. With professional management, iFarm has every chance to overcome difficulties and become stronger. I continue to believe in their team and the industry as a whole,” Taver said.

The investor added that there is no talk of bankruptcy of the international company iFarm. Taver learned about the management’s actions in relation to Russian companies after they occurred from official sources and was not involved in making these decisions. At the same time, Taver did not disclose the size of his stake in iFarm.

• Lyskovsky is known as the founder of the computer game developer Alawar Entertainment, publisher of the popular Russian games “Farm Frenzy” and “Montezuma’s Treasures.” After leaving the gaming business, the entrepreneur got involved in startups and venture capital, and then created the agritech startup iFarm, which began selling them vertical farms and software.

Lawyer opinions

Lawyers interviewed by RB.RU believe that bankruptcy proceedings may be necessary due to the lack of assets to pay creditors in full. S&K Vertical lawyer Alina Khammatova explained that the legislator orders beneficiaries to initiate bankruptcy proceedings if, within the framework of the liquidation procedure, it is determined that there are signs of bankruptcy established by the Federal Law “On Insolvency (Bankruptcy) “.

Most likely, the company identified these signs when preparing the provisional liquidation balance sheet, the lawyer added.

“In general, bankruptcy is a more comfortable procedure to “close” a business, both for owners and creditors. In this case, agreements with creditors are carried out under the control of the court and, consequently, the risks of violating someone’s rights and hiding assets are reduced,” says Veronika Chelnokova, head of judicial arbitration practice at Asto Consulting.

The lawyer explained that the initiation of bankruptcy proceedings may be due to Lyskovsky’s desire to protect himself from possible risks and expose himself to subsidiary liability for the company’s debts. According to her, the liquidation procedure does not interfere with the bankruptcy procedure; When the liquidation procedure has started, simplified bankruptcy procedures are applied and the bankruptcy procedure is opened immediately, which will allow for faster settlements with creditors.

Chelnokova added that follow-up proceedings have already been initiated against the company associated with Lyskovsky, Spinat LLC, bankruptcy proceedings have been initiated against City Greenhouses LLC following Vladimir Alekseenko’s lawsuit, and there are claims from investors to recover the amount of investments. . In particular, the Novosibirsk Zheleznodorozhny Court is considering a lawsuit by Alexey Grachev against Keil LLC and City Greenhouses LLC.

Managing Partner of Briefcase Law Office Evgeniy Kryukov clarified that the law establishes a special procedure for actions in case of liquidation of a legal entity. Thus, if during the liquidation of a legal entity signs of insolvency and (or) signs of property insufficiency appear, the debtor’s liquidation commission is obliged to apply to the arbitration court with a request from the debtor within ten days from the moment any of these signs are identified.

“We assume that in the case of LLC City Greenhouses, LLC City Greenhouses Moscow and LLC Vertical Farms, this is exactly the situation that occurred,” the lawyer said.