Yuri Milner's DST Global plans to invest more in U.S. start-ups

By Reuters

Dec 30, 2014 12:23 AM EST

Yuri Milner, the billionaire Russian who holds the largest outside stake in Chinese handset maker Xiaomi, said he expects to invest more evenly between the United States and China in 2015.

"Going forward, we will see it more balanced," said Milner in an interview, adding he saw a number of globally ambitious U.S.-based startups. In recent years, the investments by his DST Global funds have skewed toward China, including DST's participation this month in a $1.1 billion funding round for Xiaomi.

He declined to specify which sectors in the United States he had identified as particularly promising, but said DST is looking for later-stage start-ups with potential in international markets rather than any one country. In particular he seeks start-ups he believes will one day fetch valuations of over $100 billion, which he said was the case with Xiaomi.

Opportunities in China over the past few years have interested him in part because China lacks dominant physical retailers, creating openings for online retail players such as Alibaba and Jingdong, other companies in the DST portfolio.

Similarly, DST invested in Indian online retailer Flipkart in a $700 million funding round announced earlier this month.

"India is a very interesting market which has the same possibility as the Chinese market in terms of leapfrogging offline infrastructure," Milner said.

Russian-born Milner, who trained as a physicist and created a lucrative award for scientists and mathematicians known as the Breakthrough Prize, now makes his home in Silicon Valley. A series of early investments in social-media company Facebook helped make him a billionaire.

Milner's net worth totals roughly $2.7 billion, a source familiar with the situation said. Earlier this year, Forbes estimated Milner's worth at $1.8 billion.

At the time of Facebook's 2012 IPO, DST was already focusing heavily on China, where it has made investments in web-services company Baidu, Internet company Tencent, and more recently, in startups like taxi hailing app Didi-Dache and shopping software company Koudai.

Earlier this year, DST closed its newest fund, DST Global IV, at just over $1 billion. Investors include pension funds, endowments, and wealthy individuals.

In 1999, Milner founded Russian email company Mail.Ru, now a broader Internet company in which Milner no longer holds equity.

He declined to comment on the current Russian economic crisis, saying he wasn't following the situation closely as DST has no business ties to Russia.

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