“It’s important not to be afraid of listening to yourself. Do not be afraid of changing something until you find yours”, Yuriy Fylyuk, CEO of Promprylad Renovation, co-founder of Teple Misto and 23 Restaurants projects
Photo: insight.lvbs.com.ua
Yuri Fylyuk is the CEO of an innovation center based on the old Promprylad Renovation plant, which develops educational and creative initiatives. In addition, he is a co-founder of Teple Misto, 23 Restaurants and Urban Space 100 projects.
On the air of the Big Fish Youtube channel, he spoke about how he came to social entrepreneurship and how much of his own funds he invested in Promprylad.
ABOUT URBAN SPACE 100
In Urban Space 100 we have raised and invested over 2.5 million UAH. Promprylad is the continuation of Urban 100. We tested there the combination of economic tasks and city development projects.
We bought out 2 hectares of land and 4 buildings of the old factory – 38 thousand square meters – and began to reconstruct the buildings step by step, filling them with new meaning. Here we are building an innovation ecosystem at the intersection of education, art, new economy and urbanism.
ABOUT PROMPRYLAD RENOVATION NUMBERS
Today we have over a thousand private investors. WE have already found about 10 million investments, we need to raise another 20 to fully implement the project. We started 5 years ago, launched the first floor 3 years ago, now the active phase of construction is underway.
ABOUT THE PARTICIPATION OF THE CITY IN THE PROJECT
Firstly, the city included the project into the development strategy of Ivano-Frankivsk for 5 years. All preparatory meetings take place here. There is no direct financial support from the state, but the office of the investment policy department of the city executive committee came to us.
We have a lot of common initiatives: for example, the electric stations that are located here are financed by the European Union with the assistance of this department. We won a grant and are expecting 18 million UAH for the purchase of equipment.
About 30% of the grant funding comes from the city budget. The city understands that it is an important infrastructure for development and a source of pride.
ABOUT REVITALIZATION AND RENTAL OF THE OBJECT
It will be the cultural and business center of the city, which is not in Ivano-Frankivsk yet. We have to finish by the end of 2023 according to the plan. It is important for us that at the end of building it becomes a territory where new ideas, products, companies and organizations are born.
In the second quarter of next year, we have to commission another 11,700 square meters. We also signed a contract with the IT-company EPAM, they will be based here. We already lack these 38,000 square meters, the demand is four or five candidates for each next square meter.
ABOUT THE COMPARISON WITH UNIT.CITY
In terms of form, we are similar to UNIT.City, but there are differences in the business model. They have housing in the project, everything goes without it. We have a model where there are many investors, they have a group. Our teams are friendly with UNIT.City.
ABOUT THE USE FOR THE CITY
We are becoming a magnet for talents from Ukraine and beyond. People have a social perspective, young people believe that it is possible to realize themselves here as well. Last year, Forbes ranked us in the first place in terms of the attractiveness of doing business, this year – in the fourth. DOU named Ivano-Frankivsk the most attractive city for IT, pointing to Promprylad, Teple Misto, Urban Space as the main drivers.
ABOUT REPLICATION OF EXPERIENCE
We have received over 400 requests to replicate this experience so far. There are 2 attempts to reproduce it in Ukraine. One of them is the official Urban Space 500 franchise in Kiev. This is a difficult process, since it implies social interaction of Ukrainians during a period of unformed trust in each other. But it’s good that the attempts have already begun.
We will create similar projects in other cities and in a different form. It doesn’t matter what the business model is, but the philosophy itself will be the same. It was important for us to start not in Kyiv. The scale of Ukraine as a whole is interesting.
ABOUT PERSONAL MOTIVATION AND INVESTMENT
I joined this project without financial motivation, but then I realized that it could be a good tool for my financial strategy. All free resources were invested here – 700 thousand dollars. A total of 12 million were raised.
The first four years I did not take a salary, then, when the supervisory board appeared, it insisted on getting it. It is market-based, about 5 thousand dollars. Then, I consider my investments as passive income from participation in the project.
ABOUT THE STRUCTURE: WHY 1,000, NOT 100 INVESTORS
The idea was to achieve the effect of ownership of the project, so that it would not be one big investor, but a project that belongs to the city’s community. And not only cities. Ivano-Frankivsk accounts for 25% in the structure of investments, the rest is the whole of Ukraine. Now there are 45 investors who form a controlling stake. But in our case it is a business club where everything is done together. I am for fair rules.
ABOUT THE TEAM
The project development team consists of 15 people, up to 5 people – facility-management. We also use outsourcing – two law firms, two for PR marketing, these are commercial contractors. It’s important not to be afraid of listening to yourself. Feel what your role is in the team. Choose yours – what inspires you. Do not be afraid of changing something until you find yours.
ABOUT ENTREPRENEURSHIP
I started making money at the age of 13. All my life I have thought up something, but making money for the sake of money is not interesting to me. I’m interested in the intersection of business and social categories.
ABOUT THE MATHEMATICS OF THE PROJECT: ROI AND PROFITABILITY
ARR of the project, in accordance with the business model, 24%. But due to the fact that 30% is protected for the social component, for investors ARR at the level of 17-18%. The income, depending on the investment round, is 10-12% per annum. I believe that in the long run we are more attractive than investments in housing.
ABOUT PROMPRYLAD INTERNATIONAL PARTNERS
We have many unique partnerships here – for example, SRI International, this is their first project of interaction with the countries of the post-Soviet space. This is the organization that owns the patents for the invention of the Internet, bank cards. Our Western partners say that we are building an inclusive economy with access to an inclusive, responsible society.