Europeans Keep Investing in a Russian Drone Project. It ‘Has the Red Flags of a Pyramid Scheme.’

The Russian-owned “crowdinvesting” firm Solar Group Limited has spent years recruiting investors around the European Union and around the world with an urgent, exciting pitch.

Solar Group’s network of representatives advertise that the money will fund Sovelmash, a Moscow-based subsidiary developing energy-efficient electric motors that can benefit any industry. “Support innovation that has the potential to improve the environmental situation of the entire planet and ensure your own financial well-being in the future!” one FAQ page reads.

But Sovelmash debuted a particular use case for its crowdfunded motors at Russia’s Army-2024 trade show: powering its Motylyok, or moth, drone, which it markets as “the world’s first heavy-duty drone with inverted asynchronous electric motors.” It means some Europeans have been investing in a Russian drone project amid the war in Ukraine, including after EU sanctions last fall banned financing for companies at Technopolis Moscow, the zone where Sovelmash is located.

• Solar Group reports that it’s raised more than $117 million for the project to date.

Big picture: “They are trying to draw investments in a drone segment where Russia has been struggling quite a lot, which is the larger, multirotor type of platform which Ukraine has really developed and used systematically in the conflict,” said Federico Borsari, a non-resident fellow at the Center for European Policy Analysis (CEPA) whose research focuses on unmanned systems.

The wrinkle: Nine years into its fundraising, Sovelmash’s drone and motors are not yet in production. But Solar Group’s partners have been able to profit regardless of sales, according to an online FAQ page, by “promoting SOLARGROUP projects and bringing investments into them,” with “referral rewards based on the performance of their partner structure.”

At the top, those rewards can be substantial.

• According to Facebook posts from November 2024, Solar Group owner Sergey Semyonov handed France representative Gilles Weber the keys to a Rolls-Royce to honor him as the company’s “Ambassador winner” and, with a trophy emoji, its “Rolls royce car winner.” (Weber, in an emailed response to questions from The Brief, called it “a temporary and symbolic provision of use” for a Moscow work trip.)

“It has the red flags of a pyramid scheme,” said Stacie Bosley, a professor of economics at Hamline University, in St. Paul, Minnesota, and a prominent researcher of financial pyramids and multilevel marketing.

By Semyonov’s own recorded acknowledgement, it would not be the first pyramid he’s been involved with.

A national drone push and international crowdfunding

Russia’s drone-development push has broadened and accelerated in recent years, Borsari said, including through targeted investments, low-interest government loans, and a new, drone-focused branch of the military that has aggressively recruited college students since it launched last November.

Still, the “slow bureaucracy of the state” has led some Russian manufacturers to seek grassroots financing, Borsari said. “Crowdfunding has been an instrumental, critical part of Russia’s effort to address the structural problem they had in Ukraine in the first year and a half of the invasion,” he said.

Origin points: In a video clip uploaded to YouTube by a Russian blogger, a younger Semyonov is seen driving a car while discussing his past involvement with MMM, Russia’s most notorious Ponzi scheme. Semyonov confirms to a questioner that he “cashed in on MMM.”

• “You were rewarded?” the other man asks. “I parasite off of financial pyramids,” Semyonov says.

He incorporated Solar Group in Vanuatu in 2017, according to corporate records, before it launched its fundraising for Sovelmash and the motors project that June. In early 2019, Solar Group announced that Sovelmash had become a “resident” of Technopolis Moscow, a special economic zone, granting it access to a tech-innovation ecosystem and government breaks on taxes and customs duties. 

Construction of a Sovelmash design and engineering center began at the SEZ in December 2020, Solar Group says. (Sovelmash did not respond to an emailed list of questions from The Brief.)

The parent company primarily pitches Sovelmash’s motors to global investors not as a possible military asset but as a breakthrough for energy conservation.

• “When these motors are implemented, they are more efficient, cheaper, lighter, use less material, and so on,” Semyonov said in a podcast-style interview posted to Solar Group’s English-language YouTube channel last October. “So, yes, [the project is] primarily about profit, but it’s also significantly about the ethical and sustainable way we achieve that profit.”
• “This is our contribution to the efficient use of the planet’s resources,” Bulgarian representative Dimitar Dimitrov wrote on Instagram in January.

How the network works: Dimitrov is part of what Solar Group calls a “multi-level partner structure,” which it says also includes, in the EU, Austria’s Marco Hubert Scheidbach and Germany’s Johann Butschbach. (Solar Group and its listed representatives, besides Weber, did not respond to emailed requests seeking comment.)

“The founder of the structure earns income from level two and subsequent levels depending on their status,” reads an FAQ page titled “How do SOLARGROUP partners earn a profit?”

In a January webinar aimed at Austrian, German, and Swiss investors, Butschbach guided them through how to pay using Mastercard, Visa, and the USD-pegged cryptocurrency Tether. A section on Solar Group’s website detailing how to invest describes “US dollars” as “the main currency.”

Solar Group’s partners frequently post project updates on Facebook and Instagram and host webinars posted to YouTube. In one January webinar aimed at Austrian, German, and Swiss investors, Butschbach guided them through how to pay using Mastercard, Visa, and the USD-pegged cryptocurrency Tether.

Partners have promoted the motors project in person as well: According to a Solar Group website post, Dimitrov and Butschbach met with investors at a Solar Group conference in Bulgaria’s capital in November 2022, nine months after Russia’s full-scale invasion of Ukraine.

• “After the news from the conference in Bulgaria, many people from Germany wrote to me and wanted to know more,” Butschbach said afterward.

Meanwhile: Solar Group and Sovelmash were directly courting military customers.

A growing military appeal and ‘dragging’ delays

Three months before the Bulgaria conference, Sovelmash had shown off a motor-powered ATV in its first appearance at the Army trade show, hosted annually by Russia’s Ministry of Defense. 

• An expo highlight reel that included Sovelmash would be “shown to Russia’s top military commanders,” Solar Group said on its website.

By the time of the 2024 edition, two and a half years into Russia’s war in Ukraine, Sovelmash’s military appeal had become more explicit.

“The company meets the challenge of import substitution and develops motors for aviation and dual-use equipment,” Sovelmash wrote in a page of the Army-2024 catalog reviewed by Kharon.

Sovelmash exhibited a prototype of its motor-powered Motylyok drone accordingly. Russian media lauded its war-fighting potential.

• “A ‘Tsar-drone’—capable of carrying a suspended FAB-250 aerial bomb—was unveiled at the ‘Army-2024’ forum. It goes by the name ‘Motylyok’ (Moth) UAV,” the Russian online news site Mash posted to Telegram. “It flies not only toward the light but straight at the enemy. Its four electric motors are capable of lifting a 230-kilogram payload—be it an electronic warfare system or, indeed, a FAB-250—to rain down ‘democracy’ from an altitude of up to 100 meters.”
• The Russian newspaper Izvestia reported that “the device may well cover a distance of 150 km.” It cited a military expert who said such a drone “can be used to ensure logistics and supply of troops to the front line or in hard-to-reach places.”

Analysis: Supplying the front line is “always a problem, because logistics forms the backbone of military operations,” said Marina Miron, a researcher at King’s College London who tracks Russian military technology.

Troops need food, water, medicine, munitions, and even blood, Miron said, and “it’s not always feasible” for ground drones to reach them. “Using something like Motylyok … would make a lot of sense and would fill the gap that exists in the unmanned-systems ecosystem of the Russian armed forces,” she said.

• Borsari noted that heavy-duty drones, like Ukraine’s Vampire, can also “drop bombs vertically on targets.”

Solar Group’s networks have continued to promote the Motylyok since the expo and provide development updates. In a series of YouTube clips posted in February, the only use that Duyunov, the engineer, mentions for the drones is agriculture; Weber wrote that to his knowledge, Sovelmash “is officially positioning itself on civilian applications of its technologies.”

Borsari’s view: “Nothing is for only agricultural purposes nowadays.”

Held up: Solar Group’s site tracks the motors project’s progress through 20 planned stages, the last of which includes “starting to work to execute” orders. The tracker remains at “Stage 19,” which it says started Dec. 30, 2023.

Weber acknowledged in a webinar earlier this year targeting French-speaking investors that “people find the wait too long.” Before the motors could reach production and investors could receive dividends, he said at the time, Duyunov needed to create a full sample assembly line and a prototype and show clients “how it works,” including for use in the Motylyok drones.

• Although Weber posted an update to Facebook on Tuesday that mentioned “preparations” and “new tests” for the drone, he told The Brief on Wednesday that the Motylyok only “is presented as a technological demonstration” related to the use of the motors.

Other Solar Group partners, and other Weber posts, have given other explanations for apparent holdups in recent months, including authorities’ delay in issuing a “commissioning permit,” more testing, and “difficulties with Chinese equipment and metal deliveries.

A Russian warning, then more fundraising

One additional, related snag might be this: Last Christmas Eve, Russia’s Central Bank added Solar Group to its “warning list” of “companies showing signs of illegal activity in the financial market,” citing “illegal fundraising” practices. The bank simultaneously flagged Aeronova, a Semyonov-owned airship project for which Solar Group also solicits investment, for the same reasons.

• The Central Bank then added SkyWay, a cable-car initiative where Semyonov was an early employee, to the same list in March, stating that it showed “signs of a pyramid scheme.”

Split screen: The EU, for its part, has not targeted Semyonov’s network, and Solar Group’s crowdinvesting there has continued.

On March 4, its Facebook pages from Croatia to France told investors the motors project was in its “final stages” and shared the same vague but upbeat message: “The risks everyone was worried about are in the past. And we would like to congratulate everyone on that!”

Boom or bust? Miron, who had tracked the motor-powered Motylyok drone since its 2024 appearance, said she doubts it will hit the market. “If we haven’t seen it yet,” she said, “we probably aren’t going to.”

In the Semyonov interview posted to YouTube last fall, he appeared to try to preempt similar fears from investors about Sovelmash. Forty-one minutes in, the interviewer asked how Semyonov had dealt with “attacks from some vocal haters” that Solar Group might be a scam like, “unfortunately,” so many other projects online.

“The line is very, very thin,” Semyonov responded, “between a person who genuinely intended to make money but ultimately failed, so the investors unfortunately didn’t profit as expected, and someone who from the very start deliberately created a project that simply couldn’t be realized, spent investors’ hard-earned money irresponsibly, essentially stealing it, and never truly intended to deliver anything at all.”

That latter type of person, Semyonov suggested, wasn’t him.

Peter Maroulis contributed research to this report.

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