Russia is seeing an exodus of entrepreneurs, computer programmers, and other educated middle-class citizens as Western sanctions and political instability make it impossible to run an international business in the country.
Millions of people have fled their homes because of Russia's invasion of Ukraine. Russians are moving from their home country because of the war. I spoke to a number of Russian entrepreneurs and venture capitalists who said that they were leaving their homeland. Anti-Russia sentiment and economic sanctions are set to haunt them as they try to start anew abroad.
Eugene Konash, who had staff in Russia working remotely for his London-based gaming studio Dc1ab, became increasingly worried as Russia continued to mass troops at the Ukrainian border. He did not expect a full-scale invasion.
His hopes of fading tensions quickly evaporated. Western countries began imposing sanctions on Russia after it became clear that they were in a full-on war with Ukraine. The impact was felt by businesses right away.
One of Konash's employees found that his bank had been hit by sanctions. Long lines formed outside banks in Russia as citizens tried to convert their savings into dollars, only to find hefty fees and restrictions on foreign currency.
The tipping point for Konash came when investors told him that his startup would not be viable if it continued to have a heavy presence in Russia. His team in Russia agreed it was time to leave.
The guys that said they wouldn't leave Russia under any circumstances were talking about grabbing their things and driving to the land border because the tickets to get out were either sold out or expensive.
Konash hires developers from across Eastern Europe for its gaming startup, which is affordable and quality. The emphasis on science and math education has helped a world-class engineering and scientific workforce to flourish.
Foreign tech services are either banned or begin to retreat from Russia as financial sanctions make it impractical to operate an information technology company there.
All sales in the country have been suspended by both Microsoft and Google. Some users could still access the American platforms after the bans, suggesting that Russia may not have the same kind of censorship machine as China. The social media companies said they were working to restore services in Russia.
The Siberia-born gaming investor who left the country after the annexation of the peninsula said that he didn't know when development tools like Unity would be blocked.
The investor is afraid of the Russian government cracking down on dissenters.
Many Russian-built companies incorporated elsewhere in a bid to appease investors who were concerned about the political risks associated with backing Russian companies. Many firms used to operate outside the country on paper, with their teams often still based in Russia. The invasion of Ukraine has turned a trickle into a flow.
After 2015, companies were drifting out of Russia legally, according to an investor at a venture capital firm that recently moved its Moscow team out of the country. The firm would only back a Russia-based startup if it was incorporated outside the country and had an international focus.
These startup would still be based in Russia. The investor said that they would conduct R&D there because of the low cost of living.
Nikita Blanc, who changed his last name from Akimov four years ago, said that life as a startup incorporated overseas but operating for all intents and purposes in Moscow was pretty easy until recently. Heyeveryone, which is building a tool to automate investor relations management, is in the process of incorporating in Delaware.
Nikita Blanc's team worked in Moscow before leaving the country after Russia invaded Ukraine.
The startup never intended to serve the Russian market alone, but Blanc and his wife chose Moscow as a base for obvious perks: their parents could help take care of their three-year-old daughter; the country's internet was cheap and free at the time.
The best of both worlds ended for the Blancs with Russia's attack on Ukraine. Three days after the invasion, Nikita's wife was in bed, devastated by the fall of her country. She decided it was time to leave.
I couldn't do anything at work. She said that it would be hard to leave with a child. We bought a one-way ticket after packing 23 kilos of luggage.
Georgia is one of the top destinations for Russia's talent outflow. It is one of the most popular countries for Russians, along with Turkey, Thailand, and other countries.
Hundreds of Russian citizens have been taken out of the country in the past few weeks by the venture fund that left Moscow. Telegram groups with tens of thousands of Russians discussing exit plans and helping each other out have mushroomed across the internet.
As sanctions against Russia intensify on a daily basis, the would-be escape plans have to be made on the fly.
Russians who have fled abroad and left long ago are still affected by the sanctions. Visa, Mastercard and other financial infrastructure providers have stopped operations in Russia, which means expatriates using Russian banks are not able to use their cards overseas. European Union regulators have reportedly told some banks to scrutinize transactions by all Russian clients, including EU residents.
Some people are letting go of their Russian passports because of the sanctions. The Russian-born gaming investor is trying to get Singaporean citizenship because they fear that their Russian citizenship will make them ineligible for the US dollar-based financial system.
Ukrainians are accepted as refugees around the world, but we Russians are not.
The Blancs put a large chunk of their assets into cryptocurrencies five years ago, and others are betting that it can help them circumvent sanctions. If his staff get stuck in Russia, Konash expected the last resort for cross-border payments to be the two virtual currencies.
Major exchanges have stopped short of imposing blanket bans on all Russians, but they have abided by sanctions to block target individuals. Transactions are recorded on publicly available ledgers, which makes it easy for governments to trace.
EU regulators continue to argue that the sanctions against Russia and Belarus apply to all cryptocurrencies, and US lawmakers have urged the Treasury to make sure that Russia cannot use cryptocurrencies to evade the sanctions.
The difficulty of being away from family and friends is obvious, but the difference in their perception of recent events makes it even more difficult.
Our parents and relatives keep telling us to go back. Blanc said that Russia is great.
The educated, freedom-seeking Russian tech workers will not look back. The Russians I spoke to, who are either leaving the country or helping others escape, were surprisingly calm as they recounted the troubles of their country, in part because they have been mentally prepared for the inevitable farewell.
Our investor taught us to be flexible and adapt to new environments as entrepreneurs. The philosophy is helping us through uncertain times.
The Blancs may be the last wave of Russia's chronic brain drain.
Most of the engineering and scientific talent that was produced in the Soviet Union and Russia has left the world at every opportunity, according to Konash.
Who is left in the post-USSR world? The death of the education and cultural scientific tradition in the Soviet Union is probably one of the few positive things to come out of it.
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