One of Europe’s top start-up events – attended by a cohort of Scottish firms – has prompted a backlash over its decision to award its top pitching prize to a firm which encourages Russians to relocate to the UK.

Immigram, cofounded by two Russians, will receive a €1m investment from five top VCs: Accel, General Catalyst, Lightspeed Venture Partners, NEA and Northzone.

One of the other finalists which pitched to the investors at the hugely-popular Slush event in Helsinki was a Ukrainian startup called Zeely.  The Scottish attendees included Christian Arno of Pawprint and Cally Russell of We Are Unfolded.

Critics have called the decision “tone-deaf” after UK and European authorities imposed sanctions on Russia over its illegal war with Ukraine. Some have also questioned if international VCs should invest in Russian founders at all during the ongoing war.

Investors are now examining Immigram’s credentials, including the Russian founders’ backgrounds, and it is understood that if anything untoward is uncovered the investment will not go ahead.

The decision drew particularly heavy criticism from the tech community in Ukraine, as well as in neighbouring Poland, which has welcomed millions of Ukrainian refugees and has helped the displaced Ukrainian tech community since the war started.

Iryna Supruniuk, communication lead at TechUkraine, a Ukrainian tech group, said: “The situation is quickly turning into a scandal. It will definitely cause [damage to] the reputation of Slush as well as VC funds in the global tech arena. In these circumstances the organisers should change the jury’s decision

Immigram was founded in 2019 by two Russians, Anastasia Mirolyubova and co-founder Mikhail Sharonov, who both relocated to the UK in 2016. It is incorporated in the UK, and helps tech talent from more than 10 countries, including Russia, Ukraine, Belarus, India and the US, apply for the UK’s global talent visa.

The cofounders hold Russian passports, but Ms Mirolyubova has been based in the UK for seven years. Mr Sharonov currently lives in Georgia. 

Ms Mirolyubova said that her company went through an extensive selection process and rightfully won the competition. 

“We won, the business won, the idea and the traction and what we’re actually doing. And now I’m being judged by where I come from and where I don’t live,” she told the Sifted website.

She said on LinkedIn that for the last two days she’d “started getting death threats… for rightfully winning a startup competition with a wrong colour of the passport”.

She added that Immigram “doesn’t support the Russian invasion on Ukraine.” In her LinkedIn post, she also said that Immigram had waived the payments for Ukrainian clients and helped buy an ambulance car for the frontline. 

Ms Mirolyubova said the company, which has a remote team, hires IT specialists in Russia but only under the condition they relocate to another country, like Georgia, Armenia or the UK. 

One of the investors told Sifted that they are now in a due diligence process with Immigram, which should be completed in a week or two. 

It is their understanding that Immigram does not have an entity in Russia, or any employees based there, and has not taken any investment from Russian investors — which was also confirmed to Sifted by Immigram. The VC would not go ahead with the investment if due diligence revealed that any of that was not true. 

Slush said that the jury will thoroughly review the background of the winner, but declined to comment further on the selection criteria used in the competition.

It said in a statement: “Slush stands with Ukraine and condemns the Russian invasion of Ukraine. For this reason, we do not partner with Russian companies or funds or accept startup or investor applications from companies based in Russia.” 

But the backlash threatened to damage Slush’s standing in the tech community.

In a LinkedIn post, Polish VC Yaroslav Krempovych said Immigram is an instrument for Russians to “escape the consequences of the economic strain imposed on Russia by international sanctions” by emigrating to the UK. 

He said that “while some startup founders fight and die on the frontlines for the lives of their families and loved ones and their country’s freedom, others seek to assist Russians to escape the repercussions of their acts and inactions.”

According to ‘Olena M,’ an HR professional from Kyiv, the matter is “absolutely shameful for such an organisation as Slush2022.” 

Equating the award to “support of genocide,” she said it “will have consequences for Slush itself as well as for all the investors who backed this project.”

The Scottish cohort was: Christian Arno of Pawprint; Cally Russell of We Are Unfolded; Ross Toomer of Care Reality; Alex Lu of PortF.io; Dagmara Aldridge of Zumo; Janani Prabhakaran of Unbaggaged; Pooja Katara of SENSEcity; Duncan Di Biase of Brillband; Euan Cameron of Willo, and Victoria Fullarton of Toto Sleep.