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New York based German-British investor Cosmolot, Arnulf Damerau: I will promote Ukraine as the best place for foreign investment

New York based German-British investor Cosmolot, Arnulf Damerau: I will promote Ukraine as the best place for foreign investment New British investor Cosmolot Arnulf Damerau (all photos: RBC-Ukraine)
Author: RBC Ukraine

Founder of the London-based EuroAtlantic Group and now the majority owner of Cosmolot, Arnulf Damerau, on investing in Ukraine, helping the Ukrainian Armed Forces, and the country's investment attractiveness.

Arnulf Damerau enters a cafe in the center of Kyiv two minutes before the scheduled meeting and orders tea on his way to the table. It's a typical rainy November weather outside, but it seems not to affect the entrepreneur's mood. He has been working in Kyiv for over two weeks, meeting with the team of his new asset - Cosmolot, where he acquired a majority stake, as well as meeting with parliamentarians and the military.

His last visit was just before the invasion started.

The businessman, who invests in green energy and technology, has been familiar with Ukraine for a long time. In 2013, he started an ambitious project in Crimea - the construction of a 300 MW wind farm, but he never managed to implement it due to the annexation of the peninsula in March 2014. The losses amounted to about $25 million.

Another risk for investors, according to the businessman, is corruption and arbitrary nationalizations, which Ukraine has also not fully addressed and needs to be solved as an essential prerequisite to EU membership. However, Damerau believes in Ukraine and its European future. But now his interests are broader than just business.

In February 2022, the entrepreneur offered his house for use by Ukrainian families. Every year, he spends about $500,000 to support Ukrainian orphaned children (Swidomo, Dubrosvit) and periodically delivers medical supplies for the military to the nearest border airport in the Polish city of Rzeszow through Ukraine Air Rescue. His Ukraine based company Cosmolot has already donated about $3 million to purchase drones that have destroyed Russian military equipment worth $250 million.

His plans to support the country do not diminish. Next year, Arnulf plans to focus more on direct foreign investment - he plans to talk about Ukraine's attractiveness at a minimum of three major conferences around the world. Why the businessman decided to invest in Ukraine despite the war, how Cosmolot will develop, and what "homework" needs to be done for the country to join the EU and NATO - Arnulf Damerau told in an interview with RBC-Ukraine.

In August of this year, you became a co-owner of the leader in the gambling business in Ukraine - Cosmolot. Why did you decide to invest money specifically in this industry in Ukraine?

I am a private investor in a global family business, and for me, cash flows, market rules, and a familiar industry are important. Usually, I invest in real estate, green energy, software, healthcare, or financial technology equipment.

Technologies related to IT engineering and esports, gambling business. In general, the field of esports, games, and gambling interested me when I was 16 years old when I first visited Las Vegas with my father.

I was fascinated by what I saw and always wanted to open my casino. It looked exciting - show, glamour, so my college friend and I even founded an online casino. We developed software for it - roulette that allowed playing remotely.

The CFO of EuroAtlantic Group has been involved in financing and organizing casinos in Macao in China in 2004 and planned to invest in Spanish Eurovegas. This was more than 20 years ago. But later we abandoned these projects. I invest in esports and gaming companies in Sweden and other countries.

My mentor Mike Leven, former chairman of the board of Las Vegas Sands Corp, taught me a lot I know. He built more hotels than anyone else.

So I have been working in this market for a long time and know a lot about software components for online casinos.

I closely monitor the regulation of gambling activities in all European countries and even negotiated with Monte-Carlo Société des Bains de Mer, which operates casinos in Monaco, about starting work online.

When the opportunity arose, I decided to invest in a Ukrainian company. It is important that Ukraine has passed a law on gambling, which was initiated by President Zelenskyy and supported by 248 of parliament members. Now it is a legitimate business, and the government is interested in its development.

Have you personally played in Las Vegas casinos?

I have played in many casinos, but I always make only one bet each time.

Do you win or lose?

It varies. However, for me, it is always entertainment. My biggest win was in Salzburg, Austria, where I gathered with 20 friends of mine for a bachelor party. We went to the casino, and I watched the game 50 times before suggesting placing bets in a specific sector. Some bet 100 euros, some bet 500 euros, and we won. After that, we went out for dinner.

Why did you choose Cosmolot in Ukraine?

What other option could I choose? Cosmolot is number one in Ukraine and very soon in the world, employing Europea most professional IT developers. I always want to be with the leader. I have always been interested in the Ukrainian IT sector. We will make Cosmolot a global leader in entertainment that can IPO on Nasdaq.

Do you plan to develop Cosmolot as an international company?

Cosmolot will always be a Ukrainian business, made in Ukraine, associated with Ukraine. We are studying other markets and it would be great to enter the US market, South America, and Asia - everywhere where we can work legally and professionally. It doesn't necessarily have to be an online casino, it could be about games or esports. For example, the government of Saudi Arabia is investing $40 billion in esports. So, one of my proposals is to enter the global esports market with Cosmolot.

Because this company truly offers entertainment. And it would be good to turn this into a global platform.

How much do Ukrainians spend on deposits in Cosmolot on average?

$15, and this is significantly less than in other countries in the world. So, the idea that people sell their apartments, cars, and the rest of their property to play is not about our company.

EuroAtlantic Group, of which you are a co-owner, mainly invests in real estate, renewable energy sources, and technology. Is it interesting to invest in these areas in Ukraine?

In Ukraine, we plan to build wind power plants in the west and solar power plants in the south because the best wind zone in Europe is the one close to Crimea. Two weeks ago, my lawyers in Washington met with the Ukrainian Minister of Energy, Herman Halushchenko.

I was the largest foreign investor in renewable energy projects in Crimea, which is now occupied. So, now the most important thing for Ukraine is to win the war, join the EU and NATO. And this will support my business. After that, we can build power plants.

Will these projects be implemented after the war?

Some projects will indeed be implemented after the war. However, not all of them. We propose that the government start rebuilding the infrastructure, and I am interested in the housing market.

My international partner, one of the largest European construction companies, is ready to build 200,000 houses in Ukraine. We will start in the western part of the country, then such projects will appear near Kyiv, and then we will move further. And when we win the war, we will rebuild the destroyed cities.

Who will pay for this?

We will cooperate with the Ukrainian government and international organizations in the reconstruction of Ukraine. We will start with Russian sources - I believe it is a good option. The government should use funds arrested from the aggressor that destroying Ukraine and should pay for its reconstruction. And we should see these funds soon.

New York based German-British investor Cosmolot, Arnulf Damerau: I will promote Ukraine as the best place for foreign investment

Why did you decide to invest in Ukraine during the war?

Do you know the Rothschild family?

Of course. Everyone has heard of them.

When did they become rich? When Wellington defeated Napoleon at Waterloo with the help of the Germans, the Rothschilds found out about it first, bought all the bonds cheaply, and made a good profit.

So, you want to repeat Rothschild's story?

I don't want to repeat Rothschild's story. But the best investments are made in times of crisis, like during the Covid-19 pandemic when the stock market is falling. Or during wars. And this is not a selfish investment, I support Ukrainian workers and their families, develop businesses in other areas, and invest in defense technologies.

I support Ukraine in a critical time, and we pay a lot of taxes. Since the beginning of the year, Cosmolot transferred about 1,6 billion UAH to the budget. By our estimates, it makes us the top 30 taxpayer in Ukraine. The company has 200 employees who support their families. And that's more than a thousand people in total.

What is your social mission?

In Ukraine, we have a profitable business. However, I don't buy boats or planes with this money, we reinvest it. What is the best thing in Ukraine? Steel? Coal? Grain? No. It's educated people.

The best IT engineers in the world are here, and I invest in them. I have a business in the United States, and they need IT engineers of this level, but they can't find them. That's why it's important to invest in education.

Brain drain is a significant risk, and we need to mitigate it. That's why it's crucial for me to build a large Ukrainian IT cluster. To open the best IT university in Europe focused on artificial intelligence and machine learning. I already have a concept for a campus designed by Japanese architect Tadao Ando, and we will soon present this project. The university should be located in Kyiv with branches in Lviv, Kherson, and Kharkiv.

Cosmolot and personally you have been helping Ukraine a lot during the war. What projects are you currently focusing on?

There are currently hot discussions in Europe and the United States about reducing support for Ukraine, and without it, victory is impossible. Today, it's not the largest armies that win, but those with the latest technologies. That's why we created the the largest non-state Brave Inventors platform for defense, technology, innovations and market leaders where anyone interested can register their defense-related developments. This platform has already entered the Book of Records of Ukraine for "The largest number of investment projects presented at the same time".

New York based German-British investor Cosmolot, Arnulf Damerau: I will promote Ukraine as the best place for foreign investment

Every week, 5-10 new inventions appear there, and we support some of them. For example, we invested nearly $3 million in Punisher drones. It's a significant amount, but they have already destroyed Russian equipment worth around $200 million. It's a good return on investment for the Armed Forces of Ukraine and for the country's defense.

Currently, the world's best specialists are working on an ambitious goal - data automation for military needs. Artificial intelligence will be able to automatically process data from satellites, drones, aircraft, and provide summarized information about targets to brigade commanders within 30 minutes. Ukraine will win if it has information dominance. Currently, this process takes days or weeks, and it needs to be changed.

Ukraine needs C6 ISR technology. It is the joint management of all forces - coordination of military, air, naval, and ground forces using technologies, possibly even in the cloud, using next-generation graphics processors. We have the opportunity to implement this.

What are your plans for the next year?

Next year is crucial because Ukraine needs to rely on itself. It's necessary to increase defense production at all levels - tanks, missiles, jets, autonomous and robotic vehicles. No one knows when the war will end. Maybe it will end when the Russians run out of people and ammunition. Ukraine needs to replace people with technology, and we need more of it than the enemy.

Next year, I plan to speak at several conferences, such as the Munich Security Conference, the World Economic Forum in Davos, and the Milken Institute Global Conference in LA and promote Ukraine as the best region for direct foreign investment in the next five years. What is needed for this? Rule of law, a guarantee of no corruption, and physical security.

In a recent conversation former NATO Secretary General Anders Fogh Rasmussen suggested a model for Ukraine's fastest possible NATO membership, which does not apply to temporarily occupied territories. We propose and support this idea. And membership in the EU. However, it's not a Christmas gift. It needs to be earned.

Ukraine needs to build a democratic, transparent, rule of law-based society. And there should be no more discussions about corruption because everyone is talking about it now. No matter whom I speak with, it's the number one topic. This needs to be changed. Otherwise, the invaders and aggressors will receive the best gift. Therefore the motto of my charity for Ukraine - RISE Ukraine - is strength in Unity.

The construction of Europe, after centuries of struggle, is finally completed, and Ukraine is part of the European civilized world. That's why it's important to complete the EU integration process as soon as possible.