Venture funds continue to grow upward in 2017

Venture funds continue to grow upward in 2017

According to Firrma's annual activity rating of Russian venture funds, the strategic partners of which are RVC and EY, 2017 saw three times as many established venture capital funds (11) compared to the previous year (4). Besides, at the end of the year, the fund's transactions reached the same indicator as it was in 2016 — 391.

The rating considers the Russian funds that have concluded at least two venture transactions over the last year, and at least one of them was concluded with a Russian company. The activity of the funds is estimated in terms of the number of invested projects from December 1, 2016 to December 1, 2017. The rating divides funds into 4 categories: classical funds, seed funds, new funds and foreign investors. The most active classic fund was Runa Capital, which invested more than $ 20 million in 19 companies. The first place among the seed funds for the second year has been taken by Internet Initiative Development Fund which invested more than $ 20 million in 94 projects. The leader among the newcomers was Xsolla Capital, and Enterprise Island among foreign investors.

The most active funds included those organized by RVC under investment partnership agreements: RBV Capital, which invested 44 million rubles in Advanced Gene Cell Technologies (AGCT) to develop treatment for HIV infection, and the Russian-Belarusian Venture Investment Fund, which has allocated more than 800,000 Belarusian rubles to implement a pilot project for production of a rehabilitation station as well as the Softline Seed Fund, which became an investor in the sales and customer service through mobile messengers, systems for protection of corporate users against PhishMan phishing and others.

The main trends in the domain of venture capital funds in 2017 were the growing numbers of new funds — from 4 in 2016 to 11 in 2017 — and active funds — from 42 in 2016 to 44 in 2017. The corporations are becoming increasingly interested in venture market; the companies create their own accelerators and enter into partnerships. In total, Russian and foreign funds in 2017 have made 61 exits, local funds have made 52 exits, which corresponds to the previous year's indicators. The foreign investors are showing interest in Russian start-ups mainly through accelerators: in 2017 30 Russian projects were financed by foreign entities, and in 2016 this figure was twice as little — 17 projects. Local funds have been shifting to the seed stage both in term of transactions and capital, and the angel's segment with 177 transactions has been growing as well.

"The venture funds’ performance shown in the rating is the result of a positive trend which took shape a year ago. In 2017, we saw an increased number of exits, the total number of deals remained at a high level, while the number of new funds has tripled, which gives reasons to believe that the Russian venture market is becoming more attractive to investors. Another important trend is growing interest of corporations in the venture market: this year companies have signed 63 deals with start-ups, including those at the seed stage," said Alexey Basov, Deputy CEO — Investment Director at RVC

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