Tomorrow the Arena Games return for 2023. For those unfamiliar with the concept, the Arena Games began in 2020 during the pandemic-induced lockdowns as an alternative method of holding elite triathlons.
The athletes race a series of short triathlons, with the disciplines taking place in the pool, on a Zwift-connected bike and on a self-powered treadmill. This made events contained and feasible under the contemporary public health guidance.
Since 2020, the Arena Games has continued. Furthermore senior members of the Super League Triathlon team have indicated that they would like for the Arena Games format to be included in the Olympic Games in 2028.
The full name of the event is actually Arena Games Powered by Zwift. While a little wordy, this makes sense given the athletes use Zwift equipment.
The name, though, opens an interesting relationship to investigate.
There is a financial bridge between Zwift and the Arena Games that goes beyond sponsorship.
Leonid Boguslavsky, the co-founder of Super League Triathlon and the Arena Games, is an investor in Zwift and has a stake in the company.
To be more precise, Boguslavsky is the founder of RTP Global. RTP is the vehicle, or investment company, that invests into Zwift.
As per the RTP website, “in all of RTP Global’s funds, the vast majority of capital has derived from its founder, Leonid Boguslavsky”. Moreover, in RTP Global’s current fund, Boguslavsky “contributes (over) 99% of the capital”.
Therefore, through his financial contributions, Boguslavsky connects the two projects.
At this point, the exact extent of RTP’s investment and stake in Zwift has not been disclosed. It should also be noted that RTP is one of numerous investors in Zwift.
In September 2020, Zwift had its Series C funding round, which was its biggest cash injection yet, and raised USD 450 million. That valued the company at USD 1 billion.
By way of background, Boguslavksy made money in the 1990s and used the proceeds to co-found an investment company in Russia called ru-Net. Later that year, ru-Net Holdings Limited invested in a company called Yandex.
Yandex has also been referred to as Russia’s Google, although its co-founder points out that it was actually founded before Google.
At the time ru-Net paid $5.27 million for a 35% stake in Yandex.
Later, in 2011, Yandex went public and floated 17.6% of its shares on the NASDAQ exchange for $1.3 billion. Boguslavsky sold a portion of his shares during this IPO, using the funds to invest in other technology companies.
What do ru-Net and Yandex have to do with RTP and Zwift?
In 2018, ru-Net became RTP Global. This means that the money made by ru-Net can more or less be considered the money that powers RTP today.
One interesting question to ask may be over how many of ru-Net’s former investments are still owned by RTP given that they are essentially the same company.
For example, in 2016 ru-Net acquired Groupon Russia from Groupon, paying no fee.
Under the control of ru-Net, Groupon Russia was packaged with another company and rebranded as Frendi. Ru-Net appeared to continue to maintain its ownership of Frendi and Frendi operates in Russia today.
If RTP does in fact maintain the ownerships and investments that it did as ru-Net, that would indicate that the company has investments or interests in Russia today.
There is a degree to which it would make sense for RTP to continue to hold all of ru-Net’s assets, both Russian and non-Russian, given the lineage of the companies. Just because a company rebrands, that often does not mean it loses all of the investments it owns.
However, a key point flagged on RTP Global’s website is that they do not invest in Russia. As it is not clear if the ownership of companies like Frendi changed, there may be a need to clarify the nature of RTP’s holdings in Russia.
Boguslavsky is an important figure in the Russian economy. His history with Yandex, Frendi and other start-ups have shown him to be a keen investor with an eye for potential.
Such is his importance, in March 2020 he joined a meeting of investors at President Vladmir Putin’s private residence in Novo-Ogaryovo.
At the meeting Boguslavksy’s role was to advise President Putin on creating the conditions for investment in Russian technology and artificial intelligence and on potential state support. This makes sense given his expertise in the technology sector.
The minutes of the meeting can be read here.
As an aside, last year some outlets questioned the fairness of Boguslavsky’s continued involvement in the sport in light of the World Triathlon ban against Russian athletes.
His money, though, is in essence the propulsive force behind the Arena Games and his investments tie the product to Zwift.
Money, then, does not magically appear. Previously we have written about the sponsors of the WTCS to see from where some of its funding derives.
The Arena Games is no different. The money comes from somewhere and that money connects the competition with its name partner in ways beyond simple sponsorship.
Therefore, when the Arena Games is Powered By Zwift this weekend, perhaps it is worth paying attention to the financial ties between the brands and to the bridge of Russian money that connects the two.
