In the early 2010s, getting an invitation to Yuri Milner’s chateau in Los Altos, Calif., meant you’d make it into Silicon Valley’s most exclusive circle. Milner is known for making extremely lucrative bets on Airbnb, Alibaba, Twitter, Facebook and other startups — and for being a prolific patron of science. He was friends with the late Stephen Hawking and is known to have socialized with Mark Zuckerberg and actor Ed Norton. When Milner hosted a watch party for the HBO series Westworld, Google co-founder Sergey Brin appeared.
Milner is also a wealthy Russian who began his venture capital career with the help of Uzbek-born metal magnate Alisher Usmanov, close to Russian President Vladimir Putin. Most people who know Milner have touted his connection to the pro-Putin elite. Milner’s business—early-stage tech investing—is a far cry from the world of Russian oligarchs who got rich by acquiring state wealth at dirt-cheap prices. And money from Usmanov, as well as from state-controlled VTB Bank PJSC, came during the presidency of Dmitry Medvedev, when the Obama administration was urging a “reset” of Russian-American relations.
But now, as Putin’s forces are shelling Ukrainian cities, Usmanov and VTB are on the sanctions list. And Milner is on the defensive. “I can’t go back and change history,” he says during Zoom’s several-hours interview with Bloomberg Businessweek. “I can’t change the fact that I was born in Russia. I can’t change the fact that we had some Russian funds.”
Milner’s nonprofit, the Breakthrough Prize Foundation, and his venture capital firm, DST Global, have both issued statements condemning “Russia’s war against Ukraine, its sovereign neighbor,” as DST called it. A Breakthrough Foundation statement, attributed to President Pete Worden, noted Russia’s “unprovoked and brutal attacks against the civilian population”. Milner and his organizations have pledged $14.5 million to humanitarian efforts.
Still, Milner himself is careful when speaking about the war in Ukraine. He declined to express an opinion on Putin, citing statements made by his organizations, and called the war a “heartbreaking tragedy”. Now 60, he holds a black-and-white family photo taken around 1970. It shows him as a boy, wearing a knitted hat, in Zaporizhzhya, Ukraine, where he says he spent several summers with his father’s family. A few days ago, he says, he and a cousin helped evacuate a family friend, an elderly woman, from Cherkasy; Her husband decided not to leave. “I fully stand behind the statements made by DST Global and the Breakthrough Prize Foundation,” he says.
Milner, who has a net worth of $3.9 billion, is headed for a precarious position, according to the Bloomberg Billionaires Index. Foreign cash of dubious origin has a long history of finding its way into Silicon Valley – particularly money from Saudi Arabia that continued after the brutal murder of dissident journalist Jamal Khashoggi by government agents. But the war in Ukraine has stirred the West, says Ayako Yasuda, a finance professor at the University of California at Davis. “Startups have real reasons to worry about getting funding from DST,” she says.
Find stories that interest you
There is a risk that Milner could be tainted by the association, causing entrepreneurs to skip those lavish parties and turn down funding offers from DST. Investors may be hesitant to re-commit to the firm the next time they raise money, and Milner’s philanthropic work, especially a series of rich rewards for scientific achievement known as the Breakthrough Prize, could lose its cash. . Milner downplays those risks.
“The facts are on our side,” Milner says, arguing that the DST has long been independent of Kremlin interests. He spoke to Dubai, where he was helping fundraise for a company he declined to be named. He is still a Russian citizen, but he also has Israeli citizenship. He is living in the US on so-called O-1 visas for people of “extraordinary ability”, a common route for foreign-born tech entrepreneurs. He paid $100 million for the property in Los Altos in 2011 and today considers America his home.
If Milner is disappointed, it’s partly because his move to the US was designed to distance himself from his controversial early supporters during a year-long campaign. “The big irony is that we are the lowest Russian fund right now, and that is because we have consistently tried,” says Milner. He says that DST has not taken any money from Russia since 2011, when it raised $900 million in funds, nor has it made any investments in Russia. Milner notes that, until recently, most Western banks were doing business with Russia, years after its closure. He says he hasn’t seen Usmanov in about five years and hasn’t been to Russia in eight.
To back up his claim to dissociate himself from the Kremlin-linked cash, he shared a March 19 letter from his chief financial officer, Kenneth Leung, describing the banking “know your customer” and anti-money- Outlines the steps taken to comply with laundering. Provision. “If he lies,” said Milner, referring to Leung, “he would go to jail.”
He says the firm is actively working on a handful of deals in various stages of due diligence. After a ninth fund-raising of about $4 billion in 2021, DST won’t need fundraising again for a year or two, and Milner says he thinks investors will remain loyal. Some left DST in recent years, but it was not because of politics, he says. This was because in 2018 they increased their fees from 20% to 25% of profit.
Milner has powerful defenders. “Yuri Milner has been a valued friend and partner to me, our firm, and many of America’s best new technology companies for nearly two decades,” Mark Andreessen, board member of Meta Platforms Inc. (aka Facebook), wrote in one. March 1 Tweet. Financial technology company Affirm Holdings Inc. The U.K.’s Ukraine-born chief executive, Max Levchin, calls Milner a good friend. “He has been a visionary investor, and equally important, a passionate supporter and promoter of real science,” Levchin said in a statement.
Freight giant Flexport CEO Ryan Peterson took a slew of investments from DST, the most recent in February, and says he wouldn’t hesitate to accept more. “I’m not worried,” he says, that any questions he had about DST’s investors years ago were completely satisfied. “Yuri has an incredibly high morality.” He calls efforts to link Milner to the Kremlin “a bit crazy on some level” and suggests they are discriminatory, linking Milner’s birthplace to Putin’s policies.
Milner’s status comes from his success as an early-stage investor and his interest in science. Named after the legendary cosmonaut Yuri Gagarin, Milner has a degree in physics from Moscow State University. After deciding that he would never rise to the top of the field, he earned a physics Ph.D. kicked out. programmed and began selling computers instead. In the late 1980s, when the Soviet Union collapsed, he moved to the US to study business at the Wharton School of the University of Pennsylvania.
Milner worked at the World Bank in Washington, DC in the early 1990s and then moved back to Russia to run a brokerage. Inspired by a report by renowned Internet analyst Mary Meeker, she launched an incubator and investment fund to grow Russian Internet companies in the mold of eBay Inc. and Amazon.com Inc. He founded Digital Sky Technologies, a erstwhile venture capital firm. 2005, as valuations were recovering from the 2000 dot-com crash.
By the late 2000s, Milner, looking to diversify beyond Russia, created DST Global and made his way to Facebook. When DST first invested in Facebook in 2009, it was at a valuation of $10 billion, a sizable price for a young company in the middle of a recession. But almost overnight, the $200 million investment, which included the Usmanov-connected funds previously reported, went as far as drawing on leaked documents, according to a 2017 New York Times report.
Paradise Papersestablished DST as one of the top venture capital firms in Silicon Valley.
As his fortune grew, Milner spent a lot on his personal life. He invested more than $75 million in the search for extraterrestrial life and dropped an additional $300 million on the Breakthrough Prize. In 2013, he invested in satellite company Planet Labs PBC and Elon Musk’s rocket company SpaceX. Milner says that about $10 million was invested in SpaceX. He sold his position two years later for $23.56 million.
The SpaceX deal has not been reported before. Around the same time, the company, a major Pentagon contractor, was publicly bragging that its rockets do not use Russian components unlike others in the space industry. In April 2014, the company sued the US Air Force for the right to compete for contracts, complaining that the existing agreements were funneling money to Russia’s defense industry, including Russians who were under US sanctions. were under. Milner says he was under no pressure to sell and sold his stake simply because he didn’t appreciate the full potential of the satellite market. “I underestimated SpaceX,” he says. “Leaving early was a mistake.” He says he admires Musk and has spoken to him on topics such as searching for aliens and traveling to the stars. SpaceX representatives did not respond to requests for comment.
In addition to Breakthrough Listen, which searches for communications from aliens, Milner has also funded Breakthrough Starshot, the early stages of a decade-long project to build small and ultrafast spacecraft that can travel to our neighboring solar system. Will fly to Alpha Centauri.
He says the war in Ukraine throws off the purpose of the projects, which he published last year in a treatise titled “Eureka Manifesto,” which put in sharp focus. If we learn that life exists beyond Earth, the discovery “could be the unifying moment for our civilization,” he says. “It could be the equivalent of our generation taking the first step on the moon. One of those moments when we all feel the same.”
He says he is confident that life beyond Earth will demonstrate that our current distinctions based on national boundaries hold us back. “If there’s a civilization out there that’s a million or a billion years ahead of us, I’m pretty sure it came together as one,” he says. Milner, in other words, is much more forthcoming on hypothetical intergalactic political questions than questions about Vladimir Putin.
