You're reading: Dnipropetrovsk startup raises $400,000 to develop its targeted-advertising algorithms

Ukrainian startup SoftCube has attracted $200,000 from investment company Digital Future , $100,000 from angel investor Alexey Kuznetsov, and $100,000 from an as-yet unnamed foreign investor company to develop its targeted-advertising algorithms and expand into western markets.

The investors will have minority share in a startup. The third venture investor didn’t want to be named, as its agreement with Softcube has yet to be finalized.

SoftCube’s founder, Oleg Lesov, 27, told the Kyiv Post in a phone interview on April 14 that the money would help the company expand its main office in Dnipropetrovsk, as well as open an office in the European Union.

Lesov is considering Poland, Slovenia, Germany, and France as possible locations for a new office.

We work with “big-data science” in a unique way, “integrating offline and online, and personalizing targeted advertisements,” Lesov said.

The algorithm created by the startup captures and processes any user data it can find on the Internet to make a predictive analysis, which is then used to select tailor-made pop-up ads that match an Internet user’s profile.

The CEO of Ukraine’s Digital Future investment company, Oleksii Vitchenko, said in an April 14 statement that he had wanted to put money into SoftCube earlier, but that he had been wary of the risk, as the company had been lossmaking.

However, that changed after the company altered its business model and starting cooperating with big enterprises, and it eventually started to turn a profit, Vitchenko said.

“Now their product is unique,” he said. “Of course, that’s attractive to an investor. We mulled it over, and decided to invest.”

Angel investor Kuznetsov said the startup’s strong team was its main advantage.

“It’s important that the startup’s team is sufficiently qualified to wisely take advantage of its know-how, and become leaders in this niche,” he said.

Entrepreneurs Lesov, Oleg Boroday, and Roman Zakharov founded SoftCube in 2012. Currently, about 15 employees work for the startup in Dnipropetrovsk, some 480 kilometers from Kyiv.

Kyiv Post staff writer Denys Krasnikov can be reached at [email protected]. The Kyiv Post’s IT coverage is sponsored by Beetroot, Ciklum, Steltec Capital, 1World Online and SoftServe. The content is independent of the donors.