Press about RVC

Waiting for the “Exit”: Ten Successful Transactions of RVC Funds

23.06.2020
Source: VC.ru

Exits are the primary indicator of the performance of venture funds. Having invested in a company, the fund, after some time (usually 7–10 years), leaves its capital by selling its share. And if the fund manages to make money on the sale of this share, the exit can be considered successful. You can read more about the rate of return of venture funds here https://vc.ru/finance/67606-kak-ustroen-venchurnyy-fond-s-kommentariyami.

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Funds with the participation of RVC capital have already made more than a hundred exits from portfolio companies. The total amount of such transactions is approaching RUB 10 billion. The average IRR (that is, the internal rate of return) of RVC exits in 2019 was 12.9%. This year also became the fifth in a row for RVC. The cumulative financial result of “exits” was positive. We have collected ten public transactions of funds with the participation of RVC capital, which provided management teams with a good IRR, and portfolio companies — new opportunities for scaling in partnership with strategic investors.

1. Grid Dynamics

Year of transaction: 2017

Fund: VTB — portfolio investments

Buyer: Automated Systems Limited

In 2017, the fund with the participation of the capital of RVC “VTB — portfolio investments” withdrew from the investment in the company Grid Dynamics. Grid Dynamics develops cloud services for the retail, financial, and technology sectors, is engaged in the analytics of big data arrays and Omni channel services. In this company, the fund owned 22.4%. After its complete buyout by the Chinese Automated Systems Limited (ASL), the fund earned almost $29 million. In March 2020, Grid Dynamics went public on NASDAQ with a market cap of $660 million.

2. Syntacore

Year of transaction: 2019

Fund: Terra VC

Buyer: Yadro

In November 2019, the Terra VC venture fund, created with RVC capital participation, announced the sale of a stake in Syntacore, a domestic developer of microprocessor cores. The buyer of 51% of the start-up's shares was the technology company YADRO. The deal brought the fund almost three-digit yield. The company profile is semiconductor IP, and the main product is processor cores. The company sells the right to use intellectual property that it independently develops. With new shareholders, Syntacore plans to create several new directions. First, be physically present in the main markets: Asia, Europe, and the USA. The company's offices will open there. Second, expand the product line. While Syntacore mainly manufactures general-purpose processors, it plans to build specialized processors. The development of such an IP is already underway.

3. Axion

Year of transaction: 2020

Fund: Bioprocess Capital Ventures

Buyer: Krastsvetmet

In 2020, the Bioprocess Capital Ventures fund left the Axion — Rare and Precious Metals (ARDM) Company. ARDM Company, incorporated in 2010, is engaged in developing and producing new ion-exchange materials for the selective extraction of rare, rare-earth, and precious metals such as uranium, indium, thorium scandium, caesium, lithium, and palladium. Due to the high selectivity fraction, materials created by ARDM are in demand in many fields, particularly in nuclear technologies. The fund has its share in the project, with an investment return of 22.5% (IRR). The buyer of the fund's stock was the country's largest precious metals processor — Krastsvetmet.

4. Vocord

Year of transaction: 2019

Fund: Leader-Innovation, S-Group Ventures

Buyer: Huawei

In June 2019, the Chinese IT giant Huawei acquired a part of the business to develop intelligent video surveillance systems, biometrics, and computer vision Vocord, a portfolio company of the Leader-Innovation and S-Group Ventures funds. Vocord was founded in 1999. It is a recognized world leader in facial recognition, taking first place in authoritative international ratings. The company's portfolio of solutions includes systems of face detection, photo- and video fixation of violations of traffic rules and traffic flow analytics, intelligent video surveillance, and audio registration based on which complex geographically distributed projects are being successfully implemented. The company's systems have been implemented in more than 2,000 projects of commercial and government organizations in more than 70 projects of the “Safe city” class in Russia and abroad. The transaction amount exceeded the initial investment by several times. The return on investment (ROI) ratio exceeded 3x.

5. RetroSense Therapeutics

Year of transaction: 2016

Fund: RBV Capital

Buyer: Allergan

In 2016, RVC Capital, a joint fund of RVC and R-Pharm, sold the portfolio company RetroSense Therapeutics (develops gene therapy drugs, including the treatment of hereditary eye diseases) to the American pharmaceutical giant Allergan. The first tranche amounted to $60 million, with an initial investment of $2 million. In 2016, RetroSense Therapeutics was named one of the 50 Smartest Companies, compiled annually by the Massachusetts Institute of Technology (MIT), ahead of IBM and Snapchat.

6. Accenter

Year of transaction: 2019

Fund: RVC Biofund

Buyer: “Rurik” GC

In 2019, the RVC Biofund sold its 35% stake in Accentre to the Rurik Group of Companies' co-investor. Since 2017, Accentre has been providing electron beam sterilization services in medicine, agriculture (pest control), food production (extending their shelf life), etc. Besides, ionizing radiation is used to modify and improve the properties of products based on polymer materials, including electrical and heat-shrinkable insulation products, and automobile noise insulation. In 2018, Accentre entered industrial operation, and now its load exceeds 90%. The company plans to create a network of sterilization centres, including in the North-West and Central Federal Districts of Russia.

Electron irradiation of semiconductor devices / Accentre

7. Ivix

Year of transaction: 2020

Fund: Bioprocess Capital Ventures

Buyer: Ovoca Bio PLC

In 2020, the Bioprocess Capital Ventures fund left Ivix, selling its stake in the project to the Irish biopharmaceutical company Ovoca Bio PLC for $5 million. The Ivix Company, established in mid-2012, specializes in developing an innovative drug based on the signal peptide BP101 — a modulator of disorders of the limbic-reticular complex to stimulate female reproductive function. The medicine is based on scientists' creative ideas from the Institute of Molecular Genetics of the Russian Academy of Sciences. In March 2019, the team completed the 3rd phase of clinical trials of the drug. In September 2019, it applied to the Ministry of Health of the Russian Federation for permission to bring the drug to the market. It is expected that, if approval is obtained, Ivix for female reproductive health can go on sale by the end of 2020.

8. CDNvideo

Year of transaction: 2017

Fund: Leader-Innovation

Buyer: Wangsu Science & Technology

In 2017, the Chinese company Wangsu Science & Technology bought the leader-innovation fund in CDNvideo. It is a content delivery network service provider. The hubs of the CDNvideo network are installed in 17 cities of Russia and Ukraine, Kazakhstan, Georgia, Moldova, Germany, the Netherlands, the USA, Malaysia, and Singapore. The deal was the first case when a Russian company in this area was interested in a Chinese strategic investor. As a result, CDNvideo has an opportunity to offer technologies developed in Russia to the ChinaNetCenter group of companies, which operates not only in the Chinese market, but also all over the world, and is the second-largest company in the global CDN industry by capitalization.

The CDNvideo content delivery network was used to broadcast football matches of the 2018 FIFA World Cup in Russia. The load at peak times exceeded 1Tb, while more than 1.5 million users watched the broadcast.
The 2018 FIFA World Cup

9. Bonti

Year of transaction: 2018

Fund: RBV Capital

Buyer: Allergan

In 2018, RBV Capital sold its portfolio company Bonti to pharmaceutical manufacturer Allergan. Bonti specializes in the clinical research, development, and commercialization of innovative fast-acting neurotoxins for aesthetic and therapeutic applications. Allergan acquired Bonti for an initial payment of $195 million, which is significantly higher than the investment.

10. Global Fintech Solutions

Year of transaction: 2020

Fund: Da Vinci Pre-IPO

Buyer: Prytek

In 2020, the Da Vinci Capital management team sold a part of the shares of the fintech integrator Global Fintech Solutions to the Prytek investment group. Established in 2017, GFS is engaged in the transfer of global financial technologies to emerging markets. The company acquires exclusive licenses for comprehensive technology products to further transfer technology to markets with low penetration and high growth potential. GFS offices are located in Russia, Luxembourg, and Israel. GFS's clients and partners include leading financial institutions and technology companies such as Croc, Softline, and BSS. According to Oleg Zhelezko, the managing partner of Da Vinci Capital, the deal became one of the fastest exits in the fund's history. It made it possible to fix the profit on investments and show profitability.



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