The American VistaPrint company purchased the Ukrainian Depositphotos, the developer of the stock photography portal Depositphotos and online graphic design platform Crello, for $85 million. AIN.UA‘s journalist had a conversation with the founder of the Ukrainian company, Dmitry Sergeev, about details of closing this deal and his plans for the future.
You have been building this company for over ten years, and now you are selling it. Can you tell us how it feels?
Maybe it is not the best comparison. You know, it is like you have an adult daughter, which is actually not so adult, and she is moving to her boyfriend. That is how it may feel. I want to cry. And I still cannot accept that now I may not write per Skype to my lawyer or HR anymore, that I may not rush into the meeting rooms.
It feels strange. I can’t sleep well. But I am a serial entrepreneur. And I want to create something more based on all the mistakes I made in the previous project.
I have tons of ideas. And I have everything I need to create another great product in Ukraine.
Can you tell us how big your share was and how much you earned after this deal? Different sources say you’ve earned about $50 million.
Yes, something like that. I have had 55.9% of the Depositphotos common stock.
Why was the sum of the deal not so big? It happens not so often that someone buys private equity in the late stages. They let me quit the company. It’s an all-cash deal. Because usually, the purchaser sets their terms: for example, they give you a big amount of money, but then you must work for them several years and show some results. And if something is going wrong, the amount is shortening.
This time, I was completely free: if I want, I can purchase the Cimpress stock too that also will grow, for sure. A chance to quit and watch the development of my ex-company, staying aside. I lost control over Depositphotos and gave it into the hands of Vadym Nekhai.
Quitting Depositphotos was their condition or your decision?
It happened naturally. I didn’t want to get an offer when I must make the company successful for the next five years, for example, and otherwise, I wouldn’t get the amount I could have got. I had such a thing in my mind. Plus, I always have my own opinion on any event. I can’t work if there is someone over me.
So, I was ready to get one-third as much but at once and be totally free to choose. We presented our team in a way that the company wouldn’t need my presence in the future. Everybody agreed, and I quit. Vadym Nekhai is the most talented leader who went the 10-year way with me, and he will lead the team after me. He is the best option for the team.
What was the reaction of your employees?
During the pandemic, we learned to be on distance. So, the reaction was normal. Yes, there were some emotions but generally under the executives. They knew me for all these 13 years we worked together. The future of the company is full of growth, integrity, and great professionalism without depression. We did a lot. And I am proud of working in Ukraine.
Earlier you told us that in the beginning, the company was too overpriced — $250 million. Are you happy with the current evaluation?
Yes, I am happy. Because if I have not accepted the offer, Crello and Depositphotos highly likely could lose everything. Maybe, you heard that recently, Canva was estimated at $40 bln. And you can’t even imagine how much money they have now to develop their product further. It is a monster competitor.
I am very optimistic about our products, next rounds, etc. But I also need to be honest.
There are still problems in Ukraine to attract investments, and without capital, you cannot compete with those giants. De facto, we are a Ukrainian team and face all problems of our country. Tons of problems… And if we lose time, we can lose everything.
Robert S. Keane and Cimpress offered our team the widest autonomy, experience, markets, and large resources. And shortly, we would get such venture resources for sure. I decided not to risk and give the team a chance to play on the next level that the investors can quit as well. All accepted that idea. I have left, and now I can observe the company as an outsider.
And yes, I can always buy some stock of Cimpress.
What will you do next — a sabbatical or a new business?
I will launch a new project shortly. I already did it, actually. You will get to know about it soon.
So, it’s a new business. What do you plan? Will you do it in Ukraine?
I don’t want to share details too early. But yes, it will be in Ukraine. I love this country so much, and I am very proud of Depositphotos built here. For almost 13 years. We created one of the best product teams in Ukraine, and I think it is only the beginning. I am proud of my team.
Sure, it is a big problem for me personally that in Ukraine, the IT business still has complications. Reforms are running but slow. I will consider all my errors from previous projects and attract the right investors in the new project.
At first, it will be small money. If I will develop a startup to a certain level when it attracts the attention of investors, I will not need so many funds. But it will be a very interesting story I would like to tell you soon. Now it is only at a very early stage: I start to gather the team.
To be pragmatic, is it worth to build a business here now? Many people complain of the overheated market and competitive salary issues.
I don’t see any problems here. Everyone says the market is overheated. But they are just greedy people who would like to pay programmers $1.500 as they used to pay.
In the fact, Ukraine is still much cheaper than U.S., Europe, or Cyprus. At the same time, Ukraine is a beautiful country with nice people. And our growing outsourcing businesses are another evidence of that.
Ukraine is still a wonderful harbor where you can cooperate with very talented and well-educated people. Our deal was supereasy and superfast because our American buyers were excited about what they saw here.
Do you think this deal will bring more investors to the Ukrainian IT market?
I think, yes. It was our mission too to attract funds to our country. For 13 years of working here, we have got billions of hryvnias invested, and we did not park a penny abroad. A part of our mission was to create infrastructure for the product IT. We wanted to show that the investors are ready to invest in Ukrainian products and can enter and quit such companies without problems. That is how a healthy economy works. The more investors successfully quit, the more investments, workplaces, and salaries we get.
Do you plan some other investments, maybe as a business angel?
When you receive some cash, there are always problems: having too much cash is not good for anyone; you need to invest it somewhere. I am not just sitting on a moneybag. I have reinvested all of them already. Partly, in my new business. I invested in Cimpress because I believe in them.
And I am always looking for new projects. If you have something, knock on my door. Always.
