Moscow, November 6, 2018 — PwC and RVC present the 7th annual review of the Russian venture capital industry, MoneyTree™: Venture Market Navigator” (“MoneyTree™: Russia") for 2017 and preliminary results for the first half of 2018.
According to the survey, the venture capital market, which forms the basis of the venture capital ecosystem, showed a 48% increase in 2017, reaching $243.7 million, compared with $165.2 million a year earlier. At the same time, the number of transactions increased to 205, which is 21 transactions more than in 2016. Such dynamics allows concluding about a slight increase in the activity of investors in the Russian market. In the first half of 2018, as many as 97 transactions totalling $93.4 million took place.
The average transaction size in 2017 increased up to $1.5 million ($1.1 million in 2016). This fact demonstrates a positive attitude of investors toward venture assets in the context of improving macroeconomic conditions. In the first half of 2018, the average transaction size was $1.3 million. The highest growth of the average size of investments in 2017 was observed in the segment of transactions at the seed stage (2.2 times — from $0.24 million to $0.53 million).
The leader in the number of venture capital deals and the number of attracted investments remains the information technology sector. Transactions in this sector in 2017 accounted for 75% of the total number of transactions and 84% of the total amount of all transactions. The volumes of the industrial and biotechnology segments were 10% and 6%, respectively.
According to the report, the average size of transactions at the start-up stage has increased (by 49% from $0.56 to $0.83 million). At the same time, the average size of investments at the early and expansion stages remained virtually unchanged (reduction from $0.83 million to $0.82 million at the early stage and from $2.81 million to $2.77 million at the stages of extensions). According to the results of the first half of 2018, the growth of the average size of the transaction at the seed stage (from $0.53 to $0.90) and investment growth at the start-up stage by 61% (from $0.83 million to $1.33 million). At the same time, at the expansion stage, the average transaction size decreased by 29% (from $2.77 million to 1.96 million).
The number of investors' withdrawals in 2017 significantly decreased and amounted to 15 transactions, which is 15 transactions less than in 2016. The total cost of withdrawals in 2017 decreased by 33% to $79.9 million, compared with $120 million in 2016. At the same time, in the first half of 2018, with a small number of exits observed (6), the total value of all transactions in the first six months ($68.5 million) is comparable to the sum for the whole 2017.
The number of grants issued in 2017 decreased to 4,558, amounting to 88.5 million US dollars. For comparison, in 2016, as many as 4,651 grants were issued totalling $121.4 million. In the first half of 2018, as many as 2,266 grants worth $37.1 million were issued. The most active grant funds, as in the past year, were the Foundation for Assistance to the Development of Small-Scale Enterprises in the Scientific and Technical Area (Innovation Assistance Foundation, or the Bortnik Fund) and the Skolkovo Foundation.