The original article was published in Forbes magazine, February 2018
In 1995, Sharon Stone, an American actress, attended the Cannes Film Festival, and was shocked to find that her villa reservation had been taken by a wealthy businessman. The mysterious businessman in question was one Mr. Oleg Boyko.
In September of 1996, while returning home to his villa in Monaco, Boyko discovered that he had misplaced his keys. He attempted to gain entry to his home by climbing through a second-story window, but fell, receiving a grievous spinal injury.
Forbes currently lists Boyko’s wealth at USD 1.2 billion, and it’s expected to continue growing. Boyko is known for his jovial spirit and his eccentric behavior. Friends call him a jester and the life and soul of the party. “I am always in good spirits,” he claims. But he hasn’t always been this way.
In addition to his injury, the banking catastrophe of 1997 also dealt a shocking hit to the billionaire’s finances due to the restructuration all of the OLBI empire in Russia and revocation of the National Credit Bank`s licenсe from National Sports Fund. Once regarded as one of the wealthiest Russians alive, he suffered significant losses and disappeared from public life for a while.
He re-emerged in 1999, launching Evraz Group with a business partner, buying the assets of struggling steel firms, and consolidating those assets. Boyko sold his 25% stake in Evraz in 2004 for USD 600 million, stating that his mission in Evraz was finished and that continuing to invest in the metal industry was no longer interesting for him.
Boyko divulges that his most fruitful investment was purchasing the gambling company Vulkan, buying a few dozen slots halls at a price of USD 6 million in 2002. Led by Boyko and his partners, Vulkan quickly became the largest gaming holding in Eastern Europe, better known as Ritzio Entertainment, with total annual revenue reported near USD 1 billion. Boyko recalls the business having a remarkable profit margin, nearing 800 million US dollars. This goliath money-making machine served him well until 2006, when president Vladimir Putin established a law that prohibited gambling throughout Russia, with a few minor exceptions. Gambling was subsequently banned in Ukraine in 2009, causing Ritzio’s revenue to plummet in 2010. Ritzio still maintains a few gaming halls throughout Europe, but Boyko says is now just “an insignificant part of business.”
In 2007 Oleg acquired a 75% stake in the perfumery and cosmetics chain Rive Gauche. In August of 2012, Rive Gauche had grown into the second-largest perfume and cosmetics retailer, boasting 190 stores throughout Russia, and Boyko sold his majority shares for close to USD 200 million.
Ocean of finances
Boyko has long-held interests in Latvian real estate, and in 2011 he decided to invest in the online consumer lending company 4finance, which currently offers online loans to customers across 17 countries. While Boyko chooses not to disclose the amount of the investment, unconfirmed sources state that Boyko invested over EUR 100 million in the company. That investment has grown into the fintech giant.
What made Oleg Boyko decide to invest in fintech? He jokes that he discovered fintech back in the USSR. In 1988, he and a few business partners earned a living by selling computers and software to state-owned enterprises. These products were bought using bank transfers. The money was then withdrawn from accounts with a substantial 20% commission. Eventually, they sold floppy discs and computer software with cash on delivery terms. The purchasers paid by check and the sender received the cash, and then turned over a 2% commission.
Today, commercial volumes are significantly larger. Finstar has made investments in several other fintech enterprises in addition to 4finance. In 2016, Finstar collaborated with Holtzbrinck Ventures on a EUR 31.5 million investment in Spotcap, a German service that specializes in lending for small and medium-sized businesses. Finstar also invested in a P2P online-lending platform, Viventor and online marketing services provided by Rocket10 and Billfront.
Oleg Boyko calls the fintech industry “the biggest blue ocean” in the world and says that there are no other commercial sectors that have so little competition. They cater to individuals that don’t have other access to financial services, bringing together products for people who aren’t well served by mainstream banks. Boyko intends to find a way to figure out what that segment of the population needs, and then to find a system that works to serve all their needs. To bring it all together, Boyko is preparing to invest another USD 150 million, primarily targeting companies involved in payment services, marketing, data processing, and credit-risk management
Today, Boyko has expressed a robust interest in biotechnology, specifically research projects focused on increasing longevity. He believes that the field lacks investors who could unite different laboratories working in different fields of study.
But these are his future plans. For now, Boyko has dedicated his time and energy to expanding Finstar through new fintech investments. The Founder and Chairman of Finstar is building an organization that, like the once grand Ritzio, could become a “money making machine.”