The Russian-Belarusian Venture Fund to Invest in Ten New Projects until 2020
Representatives of the Russian-Belarusian venture capital fund RBF Ventures announced new plans to invest in new projects and attract commercial co-investors to the capital in the framework of the Open Innovations Forum.
As part of the formation of the RBF Ventures fund, more than 150 start-ups have already passed the initial assessment. From this number, a number of the most promising projects were selected and worked out in detail, and the structuring of transactions is already underway. Dmitry Kalinin, the managing partner of the Russian-Belarusian Venture Fund from the Republic of Belarus, spoke about this at the Forum.
According to Dmitry Kalinin, RBF Ventures is becoming a key participant in the Belarusian venture capital market.
“According to our estimates, no more than 5% of Belarusian start-ups are ready to attract venture financing now. We intend to support the market. Today, the Fund is focused on providing the most convenient and popular investments to the Belarusian venture capital market — from 500,000 to 2 million US dollars,” Kalinin said.
“The economies of Russia and Belarus are closely linked, so RVC is certainly interested in joint activities,” says RBF Ventures managing partner, RVC board member Mikhail Fedotov. — We have positive forecasts regarding the development of bilateral cooperation; we plan to increase the size of the fund — at the expense of not only state participants, but also private investors. Shortly, the fund is announcing new deals. It is crucial that this project not be just a political initiative, but a working commercial institution aimed at making a profit.”
“Start-ups of the two countries can get funding for the fund at both the seed and growth stages,” added Anton Vasiliev, the RBF Ventures Senior Investment Director. Conditions for obtaining funding is the registration of a company in the Russian Federation or the Republic of Belarus. The industry focus of the fund is IT in a broad sense, including the Adtech, AgTech, EdTech, and MedTech segments".
According to him, RBF Ventures provides investments in the amount of 25 million roubles for projects in the early stages and up to 140 million roubles for companies in the growth stage. The decision-making process is as transparent and quick as possible. After the initial analysis, the conditions of the transaction and due diligence are prepared in 1-2 months. Closing is carried out on average in 2-4 months.
At the forum, the Belarusian side also presented the High-Tech Park, which provides residents with a unique tax regime. The panelists invited Russian start-ups operating in Belarus to become residents of this technology park.
“In addition to tax breaks, it provides residents with special legal conditions. We conducted a study to find out how to increase the number of successful transactions in the market. Within two years, 500 market players were polled and found that in 70% of cases, transactions were formed according to English, American or Cypriot law. In other words, start-ups are much more convenient to use foreign jurisdiction. Therefore, we decided on the formation of the Belarusian national law on venture transactions with a focus on the tools of British institutions. In December 2017, a presidential edict on the development of the digital economy was adopted, which included the norms of English law. Now we see that it works successfully, there are clear and working patterns,” said Denis Aleinikov, one of the key developers of Presidential Decree No. 8 “Digital Economy Development”, managing Belarusian law firm Aleinikov&Partners.
The Russian-Belarusian venture investment fund RBF Ventures was established in December 2016. Its size is 1.4 billion roubles. The investors of the fund are the Belarusian Innovation Fund (Belinfond), RVC and RVC Infrafund that have invested at the first stage the amount of 50%, 49%, and 1% respectively. The Managing Partners are RVC Infrafund, LLC and Belarusian Innovation Fund.
By: Vladimir Bakhur