Czech Startup Founders Turn
Billionaires Without VC Help
By Ilya Khrennikov
December 17, 2020, 11:00 PM EST
Google picked
JetBrains for key coding language for Android
Founders shunned VCs,
bootstrapped to billion-dollar fortunes
While investment funds in Silicon Valley have turned the
owners of many unprofitable startups into billionaires overnight, the founders
of JetBrains s.r.o. have managed the feat without the help of venture capital.
The Prague-based
startup, whose programming language last year became Google’s preferred
development tool for Android, is worth about $7 billion, according to
the Bloomberg Billionaires Index. That valuation would make Sergey Dmitriev and
Valentin Kipiatkov, two of the three Russian founders who incorporated
JetBrains in 2000, billionaires.
The firm, which boasts it is among the biggest employers of
programmers in St. Petersburg, isn’t interested in raising capital amid high
demand for technology companies, according to Chief Executive Officer Maxim
Shafirov.
“Venture capitalists write every other day, and I feel like
a very impolite, unkind person, because I’ve stopped answering,” Shafirov said
an interview. “We’ve got enough resources to realize our ambitions.”
The lack of investors means JetBrains is under no pressure
to sell shares amid the current listing boom, with December set to be the
busiest year-end on record for initial public offerings in the U.S. Venture
capital investments in the country hit the highest in almost two years in the
third quarter, reaching $36.5 billion, according to a CB Insights report.
Unlike many companies selling stakes this year, JetBrains
already turns a profit. It is on track this year to boost earnings before
interest, taxes, depreciation, and amortization by more than 10% to over $200
million, according to Shafirov.
Its recent success stems from its open-source Kotlin programming language for Alphabet Inc.’s Android.
In 2019, Google announced Android development is “Kotlin-first,” making it the
preferred language for the world’s most popular mobile operating system. Google
says over 60% of professional Android developers use Kotlin, including Google
itself, which tapped it to design its Maps, Home and Play apps.
“It’s a profitable private company that, as far as I know,
never attracted external financing,” Konstantin Vinogradov, a principal at Runa
Capital venture fund who helps manage $420 million in assets, said. “Big VCs
would jump at the chance to buy a stake in JetBrains.”
Dmitriev and Kipiatkov maintain control over the company,
according to Shafirov, who declined to disclose their stakes. The Bloomberg
Billionaires Index valuation is based on JetBrains’ 2019 results and the value
of publicly-traded peers.
JetBrains’s target audience is the IT sector, where its
developer tools command a loyal following. 9.5 million programmers use
JetBrains software and 20% of them are paying customers, Shafirov said.
430 of the Fortune 500 are clients, including Citigroup
Inc., Google and Volkswagen AG, according to JetBrains. Its main programing hub
is in St. Petersburg, where it employs almost half of its 1,500 staff.
The company is now seeking to expand into the wider market
of workplace collaboration tools and last week introduced a product that will
compete with Atlassian Corp. and Slack Technologies Inc., which this month
reached a deal to be acquired by Salesforce.com Inc. for $27.7 billion.
JetBrains decided to introduce the program, called Space,
after finding that existing options didn’t meet the demands of its growing
workforce, according to Shafirov.
“We don’t have revenue growth targets,” Shafirov said.
“Basically, we wrote all this so that making software would be a pleasant and
creative process. And now our mission is to expand to other niches.”
— With assistance by Alexander Sazonov
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