Pandemic-related Losses of the Russian Venture Capital Market Are Now Estimated
Visitors at the Skolkovo Exhibition Stand
© RIA News. Alexey Danichev
The coronavirus pandemic and Russians' self-isolation will lead to a decrease in the volume of investments in the Russian venture capital market for the current year within 40%, while among the victims will be early-stage projects, according to market experts interviewed by RIA Novosti.
“I think that the global average investment volume will decline slightly — by 10–15% maximum, since in peak quarters the fall was up to 30%, and now most markets are growing due to investments in the post-covid economy. In Russia, the decline will be more serious; I would expect the market to contract by 30–40%”, said Denis Efremov, the principal of the managing company of venture funds Fort Ross Ventures.
Deputy General Director, Investment Director of Russian Venture Company (RVC) Alexey Basov noted that a decrease in the volume of investments in the market is inevitable, but it will be modest.
“Most likely, the results of the year will show a decline in the segment of the early stages, as investors will support the most stable, mature projects and existing portfolios. They will focus on rescuing and retaining them, as well as using the opportunities that the crisis opens up”, he expects.
Currently, according to Basov, the number of transactions that investors plan to close this year is growing. CSR experts agree with him: according to their data, when buying start-ups, businesses show the tremendous demand for artificial intelligence technologies (32% of companies plan to use), business process automation (28%), and big data processing programs (27%).
“Amid the pandemic, the number of start-ups in the mobile and online services, software and retail food industries is growing. So, the interest in them on the part of the venture investment market participants should also grow”, explained Anton Beloglazov, head of industrial research at the Center for Social and Economic Research of the CSR.