June 30, 2010 Russian Ministry of Economic Development and RVC held a press conference, devoted to the results of the 1-st half of 2010, particularly revealing details of the BoD decision making on the conceptual framework of the two new RVC funds - Biopharmaceutical Cluster Fund (RVC BioFund) and Infrastructure Investments Fund (RVC InfraFund).
RVC BioFund was necessitated by a low share of Russian innovative drugs on Russian pharma market - less than 1%. With virtually zero infrastructure to develop biopharma and medical start-ups, foreign services devour 50% to 80% of Russian investment resources. To remedy this, RVC BioFund will be investing capital into service companies of this cluster and biotech start-ups. Additionally, it will be launching an ecosystem to generate and incubate as many biotech projects as possible.
Initially, the capitalization of the BioFund will be RUB 1,5 bln. Its investment profile includes innovative biopharma companies and service companies providing contractual laboratory, information, analytical and consulting services to biotech, pharmaceutical and medical companies.
RVC InfraFund’s key objective is to provide a toolkit of services to technology companies to unlock their growth potential and overcome the roadblocks they encounter on the market. RVC InfraFund was necessitated by the lack of information on the market infrastructure and its players, low IP culture and poor understanding of its role in business strategy, a bad need for good personnel that could boast of both innovative start-up management skills and technology competences.
“RVC InfraFund will create the so called “soft” market infrastructure”, said Igor Agamirzian, CEO of RVC. “Our InfraFund was called forth by today’s needs of the Russian innovative market thus now the latter has a number of roadblocks impeding a faster growth of innovation companies. The new market infrastructure will provide innovative entrepreneurs with consulting services on marketing, finance, law etc. As we observe it, innovative technology companies are in bad need for professional consultations tailored to the innovation market needs”.
Initially, the capitalization of the InfraFund will be RUB 2 bln. Its investment focus will include companies providing specialized consulting, information and analytical services.
“These funds are part of RVC efforts to render Russian VC market compliant to the level of best international practices”, noted Elvira Nabiullina, Russian Minister of Economic Development and Chairperson of RVC Board of Directors.
The press conference exposed RVC’s international investment activities. In April 2010, the Board of Directors of RVC resolved to join an international venture capital investors’ alliance by establishing in the UK a specialized venture capital fund named RUSSIAN VENTURE CAPITAL I LP and invest the dollar equivalent of RUB 300 mln (as per Central Bank of Russia exchange rate - USD 10 mln) in BrightSource Energy Inc as a part of Round D totaling over USD 150 mln.
The pool of BrightSource Energy Inc. investors includes Morgan Stanley, BlackRiver, Chevron Human Energy, BP Alternative Energy, StatOil HydroVentures, Draper Fisher Jurvetson and other world’s largest funds.
“Russian Venture Company became the only Russian investor to participate in such large-scale high-tech transactions”, said Igor Agamirzian, CEO of RVC. “An international venture capital fund is a key to close partnership between RVC and leaders of the global venture capital market”.
“The amount of capital raised during Round D is indicative of the level of confidence in our world-class team and the paramount role of our technology to meet the growing global demand for cost-effective and reliable solutions”, said John Woolard, CEO of BrightSource Energy.
Additionally, the Board of Directors of RVC resolved to establish a special-purpose VC fund to carry out transactions aimed at joining international later-stage funds. A few days ago, June 25, 2010, RUSSIAN VENTURE CAPITAL II LP was registered in the UK. It is a 100% RVC backed fund focused on joining leading international later-stage venture capital funds. This mechanism of joining international later-stage VC funds (consortiums, alliances) will provide RVC with access to the best VC practices to be disseminated on the Russian market. Additionally, RVC will get a firm foothold in this club of leading international funds, which in return, via RVC, will find their shortcuts to investing capital into Russian companies.
“Modern Russia must stand up to this new challenge which is a wave of technological changes based on the latest achievements of science and engineering. With our considerable R&D groundwork, we must learn to use it efficiently both for successful internal socioeconomic development and large-scope integration into global economy”, said Elvira Nabiullina, Russian Minister of Economic Development and Chairperson of RVC’s Board of Directors “A fund under international jurisdiction and the closure of first deals in consortium with the world leading venture fund is a significant breakthrough for Russian Venture Company on its way to assimilating the best international venture market and technology entrepreneurship practices as well as to venture business know-how”, concluded Ms. Elvira Nabiullina.
About BrightSource Energy, Inc.
BrightSource Energy, Inc. provides clean, reliable and low cost solar energy for util¬ity and industrial companies worldwide. The BrightSource team combines nearly three decades of experience designing, building, and operating the world’s largest solar energy plants with world-class project development capabilities. Now company has 2610 megawatts of power generated on technologically licensed solar heating stations under contract.
BrightSource’s solar plants lead the industry in environmental design and help customers reduce their dependence on fossil fuels. Headquartered in Oakland, Calif., BrightSource Energy is a privately held company with operations in the United States, Israel and Australia.
For more information please visit www.BrightSourceEnergy.com.