Carbogatto Investment Story

Produce rideable prototypes and test market demand. Driveeco LLC was established with five participants: A. Berdinskikh and A.F. Khayrullin as angel investors, I. Stepanoff and D. Smolin as implementers, and G. Posipanov, who received an option as a reward for attracting investors.

• I. Stepanoff: 35% (as the project’s CEO)
• A. Berdinskikh: 40% (non-operational involvement)
• A. Khayrullin: 12.5% (business process administration)
• D. Smolin: 10% (non-operational involvement)
• G. Posipanov: 2.5% (non-operational involvement)

Opened and equipped an R&D office in Moscow Assembled a small team of four talented engineers Produced the first physical prototype under contract with a Moscow design bureau

The bike’s structure revealed significant weaknesses in the carbon frame’s rigidity and suspension mounting. This led to a decision to change the technological approach and engage a different local manufacturer for carbon fiber components.

Carbogatto LLC was founded, and all rights from Driveeco LLC were transferred. Artem F. Khayrullin acquired Denis Smolin’s 12.5% share for the amount of his pre-seed stage investment. Georgy Posipanov’s 2.5% share was transferred to Artem F. Khayrullin by mutual agreement due to non-fulfillment of the initial business plan and the need to attract additional investments.

Hire engineering and administrative staff, develop the serial model, produce working prototypes, conduct tests, participate in EICMA to confirm demand, and organize assembly production and warehouse.

• I. Stepanoff 25% (CEO)

• A. Khayrullin 25% (In the position of Director of Business Development since September 2019)

• A. Berdinskikh 30%

• A. Kruglikov 20%

• Organized a test production for prototyping
• Produced 4 prototypes.
• All carbon fiber parts, metal milling, and plastic molding were produced at Russian factories, while auxiliary equipment was sourced internationally
• Successful Carbogatto H7 prototype presentation at EICMA 2019, resulting in dozens of dealer partnership and distribution offers
• Over 500 pre-orders were received through the website during and after the exhibition, as well as via targeted social media campaigns. This confirmed demand for Carbogatto. The website was later shut down as we could not provide exact delivery timelines and lacked the ability to process payments

In February 2020, an external technical audit of the Carbogatto H7 prototype was conducted by the Spanish agency IDIADA. The audit revealed that Carbogatto H7 was classified as an electric motorcycle L1e-B, not a light electric scooter L1e-A, and will need to go through the vehicle type approval process in the countries of sale. The audit identified around 30 issues, 4 of which were critical and would require significant reengineering. Explore this period in detail in the article "Forged Through Generations. Chapter 3/4: Carbogatto H7"

Following a thorough financial assessment, it became clear that the project’s continuation would require structural changes in the companies and management approaches, and the attraction of additional investments.

Due to strategic and technical miscalculations, as well as negligence and irresponsibility, Ihar Steponoff left the company in March 2020. Artem F. Khayrullin took responsibility for managing the project and, by exiting through the sale of his stake in the snowmobile distribution business (Motorfirst), also participated in financing the project alongside other stakeholders.

• A. Khayrullin 30% (since April 2020, CEO)
• A. Berdinskikh 40%

• A. Kruglikov 30%

After conducting full-scale road tests in August 2020, it was decided to abandon the further development of the Carbogatto H7 model. A decision was made to start the development of a new model, Carbogatto LR Monocoque, based on the technical groundwork and taking into account the results of all the tests conducted over the two years of the H7 model's testing. The new model featured an upgraded monocoque frame, a battery 1.7 times more powerful, and, despite external similarities, became an entirely new model.

In light of investor A. Kruglikov’s decision not to continue funding the project, his stake, acquired during Seed Round 2, was fully bought out by two new investors, brothers Artur and Timur Jamalutdinov. They assumed responsibility for further project financing. According to the terms, the project was to be funded in quarterly tranches, based on an approved budget for each quarter.

• A. Khayrullin 32% (CEO)

• A. Berdinskikh 30%
• A. Dzhamalutdinov 15%

• T. Dzhamalutdinov 15%

• Additionally, 8% were allocated for options: 4.5% for key engineers and project team members, and 3.5% for the sales and marketing team.

Complete reengineering of Carbogatto, addressing all requirements for vehicle type approval and feedback from road and stand tests Relocation of carbon fiber component production, aluminum machining, and plastic component manufacturing to China and Taiwan Organization of assembly production Development of digital products, presentation, and opening of pre-orders.

1. By early October 2021, it became clear that there were no ready-made solutions on the market for the required electronic control systems, peripheral device connectors, displays, and control panels that met the necessary size and functional requirements.
The company had to create a dedicated team for electronics development and HMI (20 people), which significantly increased the project budget and extended the timeline by two years. (This department later became a separate project, driveeco_electronics.)
2. Technical coordination of the new frame design with engineers in Taiwan took longer than expected due to the complexity and need to meet dimensional tolerances. This process, initially planned for one month, stretched into six months, delaying until March 2022.
3. The onset of Russia’s full-scale invasion of Ukraine on February 24, 2022, made it impossible to continue project operations from Moscow, for both logistical and moral reasons. In early March 2022, following A. F. Khayrullin's insistence, the relocation process to the UAE was initiated, and in May 2022, Carbogatto Trading LLC was established. All contracts with suppliers and manufacturers from 9 countries were renegotiated with this new company.

These factors led to a significant increase in the project budget. However, the greatest challenge came at the end of April 2022. Due to sanctions and the exit of many Western companies from the Russian market, the founders' other businesses began to collapse. New investors and project participants completely ceased fulfilling their financial obligations, putting the project’s continuation at risk. The burden of financing the development team and operational office in Dubai fell entirely on A.F. Khayrullin.

Partial financing resumed in September 2022 and continued intermittently for three months. This period became a catalyst for disagreements among project participants. In January 2023, A. F. Khayrullin issued an ultimatum to his partners: either fulfill their obligations or exit the project. As a result, the parties reached an agreement that the participants would make the final tranche to cover current obligations to third parties and completely exit the project. At this point, the round was only 50% closed, not including its increased evaluation (the buyout amount from A. Kruglikov is also excluded from calculations). An agreement was signed among participants to refund the investment upon the entry of a new investor. However, during subsequent negotiations, this was rightfully changed to a refund only in the case of successful project realization. Further project financing fully fell on A.F. Khayrullin.

Since March 2023, the project has been fully funded by A. F. Khayrullin, who became the sole owner of the company. By October 2023, the funding capacity was fully exhausted, and a new investor was not secured for a number of reasons. While the new Carbogatto LR Monocoque model was already undergoing road tests and nearing completion, it was still not fully realized in terms of electronics and had some minor technological refinements to the braking system—specifically, a full replacement was needed. In addition, digital and legal development, as well as other relatively simple tasks requiring financial investments, were still ongoing.

During the most challenging period, support came from A. F. Khayrullin’s father, Faat M. Khayrullin. After reviewing the project details and visiting the R&D office, he agreed to provide a credit line to complete the engineering phase. The funding was sourced from his company, which specializes in agricultural fertilizer supply, and personal funds to cover international expenses, particularly the operational office in Dubai, UAE. According to the agreement, the amount is to be repaid after the start of sales, with Faat M. Khayrullin receiving an equity stake in the company.

• A. Khayrullin – 87%
• F. Khayrullin – 5%

• Team Options – 8% (4.5% allocated)

Despite all the challenges, the project team successfully completed the engineering phase and conducted all necessary technical tests for Carbogatto LR Monocoque. One of the team’s major achievements was the creation of the electronics division for vehicles, which was showcased at an exhibition in June 2024, confirming the product's market demand. This division was spun off into a separate project driveeco_electronics which, like Carbogatto, operates under the management of Driveeco Engineering Holding.