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Russian Venture Market: Year Results and Forecasts

06.12.2019

On December 5, an expanded meeting of the Venture Market Council at RVC was held in Sochi as part of the Global Technology Leadership Forum. Representatives of the industry discussed the current state of the venture market, the main trends, and prospects for its development.

Speaking about the development strategy of the venture capital market, the discussion was moderated by Alexei Basov, Deputy General Director and Investment Director of RVC, that today there is a whole set of multilevel initiatives for its development:

“You can list about 50 different initiatives that are already partially starting to be implemented. They are actively discussed and turned into amendments to laws. This work goes fast. And we can assume that in a few years, the legislative framework will be significantly changed.”

Oleg Fomichev, Director for Strategic Planning and Development at ComplexProm, assessed the role and effectiveness of state support in 2019 from the point of view of legislative regulation of venture activities in the field of innovation, and also spoke about the activities of private foundations:

“We see that large private corporate venture funds are appearing in Russia. As a rule, they do not seek financing and do not want to raise money from the state or quasi-state sources. However, at the same time, they do not limit themselves only to the Russian market. Thus, Russian money works abroad. This scheme forms in Russia new managerial personnel, new teams at least. However, so far, in terms of the number and volume of venture deals, this year shows lower statistics than last year: either we did not notice part of the players or the venture market is now stagnating. And this is an opportunity for government development institutions to shoulder the market.”

Oleg Konev, the managing partner of Da Vinci Capital, characterized the exit market in terms of accessibility for Russian funds for the year:

“Exits are greatly influenced by the presence of positive minds and liquidity in the market. So, large Russian banks already sometimes buy “strange” companies from different sectors. We observe similar activity on the part of corporations. The criteria for evaluating start-ups are changing.”

Vladimir Sakovich, General Director of Skolkovo Ventures, spoke about how much the state should participate in the venture capital market:

“At the moment, many government initiatives have been announced to launch new venture capital funds with the participation of RVC, large banks, and corporations. There is a feeling that next year there will be more money on the market than the market is able to accept — more than projects capable of mastering these amounts in a quality manner. At the same time, there will be competition between investors for good technology projects. Currently, there is not enough money for start-ups at the seed stage, and this is where the state should actively help.”

Alexey Konov, Managing Partner of RBV Capital, spoke about what is most important in the venture capital industry:

“The entire venture capital market is a reputation market. The great merit of RVC and development institutions is that they help us, managers, and other foundations to build a reputation and enter global markets. I note that, for example, Russian developers of IT products for the biomedical cluster are among the most powerful in the world. There are strong teams in other areas. We can and must work in the international arena, and for this, we need to accumulate experience and reputation.”

The Venture Market Council, created by RVC in partnership with the Ministry of Economic Development of Russia in August 2017, is designed to consolidate all participants in the venture market to develop measures to stimulate the development of the national venture industry.

The Global Technology Leadership Forum was organized by RVC and the NTI Platform with the support of the Government of the Russian Federation. The focus of the Forum is the formation of the technological policy of Russia for the next decade, the evaluation of the results of scientific and technological development, the determination of the role and leadership potential of Russia in the global technology agenda and the formation of the NTI strategy for the period of 2020–2025. Among the participants of the Forum, there are more than a thousand representatives of companies, investors, authorities, and development institutions. The strategic partner of the Forum is VEB Ventures. The partner in the plenary meetings is Rosatom State Corporation. The forum’s partner is also Sberbank of Russia.



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