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RVC Reviews the Results of 2019

27.01.2020

RVC Reviews the Results of 2019

In 2019, RVC continued to create venture funds managed by professional market teams, as well as to improve the institutional environment of the venture capital market. At the end of the year, the total amount of funds created with the participation of RVC capital increased by 15.6 billion roubles and reached 64.4 billion roubles. The current portfolio includes 29 venture funds that have invested in 180 innovative companies in the field of information technology, telecommunications, medicine and healthcare, energy, and other areas. According to the results of the first half of 2019, the volume of the venture capital market in Russia amounted to $248 million, with 129 transactions concluded.

The implementation of the National Technological Initiative, whose design office has been RVC since 2015, has also become a priority area of work. NTI is aimed at developing new markets and creating products that will increase the competitiveness of the economy, national security, and improving the quality of life of citizens. In 2019, RVC continued to enhance the procedures for supporting business in NTI, as well as mechanisms for finding technology companies with the potential to enter global markets. Over 2019 alone, the NTI Project Committee has considered 93 new projects, which is 2.5 times more than last year. At the same time, the average time for considering projects has been reduced by almost half, and today it is no more than 50 days. At the end of the year, 59 high-tech projects received support from NTI; their funding reached 9.7 billion roubles, of which more than 30% was investment financing.

In 2019, new business support programs at NTI were also presented. A “single window” was created for access to these programs through the RVC Digital Platform, on which about 2.5 thousand companies have been registered since May 2019. The new interface made it possible to simplify interaction with business and increase the transparency of project appraisal at NTI.

Besides, in 2019, RVC became the operator of support measures under the national program “Digital Economy of the Russian Federation”. In 2019, there were completed competitive selections of leading research centres (LRCs) and leading companies in the development of products, services, and platform solutions based on end-to-end digital technologies. According to the selection results, grant support from RVC for 2.8 billion roubles will be received by 11 organizations.

“A huge demand has been formed all over the world for new approaches and solutions. Technologies are emerging today that are changing entire industries, and their implementation time is rapidly shrinking. Last year, RVC provided systemic support to the technological business in our country using a wide range of tools. All of them were aimed at achieving long-term goals: the establishing of domestic leading companies, accelerated implementation of technologies in the economy, and social area, improving the quality of life and human well-being. In 2020, RVC, as a development institution, will continue to fully participate in the implementation of the state's technological policy,” commented General Director of RVC Alexander Povalko.



INVESTMENT ACTIVITIES

Key figures of the investment activity of RVC

In 2019, some new venture capital funds were created with the participation of RVC capital:

  • In the framework of stimulating corporate venture investments, RVC jointly with Gazprom Neft, Gazprombank and VEB Innovations created a venture fund called “New industry” (New Industry Ventures) with an initial target volume of 4 billion roubles. The fund's focus is on investing in companies developing new materials, technologies, products, and services for the oil and gas industry, petrochemicals, and energy. Also, in November 2019, RVC signed agreements on the creation of corporate venture funds with STLC and Russian Railways.

  • In December 2019, successfully ended the open selection of a management company for a new joint fund of RVC and the Ministry of Industry and Trade. The winner was the investment team of Unicorn Capital Partners. The fund aims to invest in projects in the field of production of innovative medicines, medical devices, and software. RVC's contribution to the capital of the new fund will amount to 4.5 billion roubles; the same amount is planned to be attracted from private investors.

  • In 2020, the selection of a management company for Foundation to Support Advanced Educational Technologies created within the framework of the federal project “Personnel for the Digital Economy” of the national program “Digital Economy of the Russian Federation”. A fund of 7 billion roubles will invest in Russian and international projects to transfer the most promising technologies to Russia and the expansion of innovative Russian companies abroad.

  • In 2019, RVC also announced the entry into equity Terra VC — A new joint fund of Phystech Ventures and North Energy Ventures worth $40 million. An investment strategy involves investments in late-stage companies in the field of energy, smart networks, the industrial Internet of Things, robotics, artificial intelligence, and machine learning.

In 2019, with a positive financial result, the first fund from the “historical” portfolio of RVC — CEIF Maxwell Biotech completed. Since its creation in 2008, Maxwell Biotech has invested in nine socially significant medical projects, has become the first Russian venture fund focused on innovations in the field of biomedicine.

During the annual period, RVC funds approved the provision of investments to 24 portfolio companies for 1.4 billion roubles. As part of continuing to improve the quality of portfolio management, RVC, with the support of the EY consulting company, has developed a methodology for evaluating the assets included in the investment portfolio. Its implementation made it possible to unify approaches to assessing the results of investment activities of RVC funds and increased the transparency, reliability, and validity of the calculation of indicators. In 2019, RVC funds left 24 portfolio companies for a total amount of RUB 2.3 billion, which is 35% more than in 2018 (1.7 billion roubles). Of these, 15 exits were with a positive financial result. So, in June 2019, the Chinese IT giant Huawei acquired part of the business of developing intelligent video surveillance systems, biometrics, and computer vision Vocord — a portfolio company of the Leader-Innovation and S-Group Ventures funds. The transaction amount exceeded the initial investment by several times. At the end of 2019, the Terra VC fund sold its stake in the developer of microprocessor and microcontroller cores Syntacore of the YADRO company with almost three-digit profitability. A number of exits from portfolio companies were also carried out by RVC subsidiaries.

Institutional Activities

In the framework of improving the institutional environment, the venture market created at RVC Council continued, which brings together the leaders of the Russian investment community. Were launched two new Council working groups — a working group on international cooperation for importing the best practices of foreign capital into Russia, as well as a working group on educational initiatives and promoting the venture capital market, aimed at expanding the community of professional LP and GP in Russia.

To increase the transparency of the national venture capital industry, RVC implemented several analytical projects. An annual review was prepared in partnership with PwC “MoneyTreeTM: Venture Market Navigator for 2018 and the first half of 2019. RVC in the status of a general partner also supported the release of an independent study “Venture Barometer”.



NATIONAL TECHNOLOGY INITIATIVE

NTI projects

In 2019, the Interdepartmental Working Group on the Implementation of NTI under the Government Commission on Modernization of the Economy and Innovative Development of Russia (IWG) approved 15 new NTI projects for implementation — they will receive support in overcoming regulatory barriers, as well as financing in the form of grants and contributions to the authorized capital totalling about 3 billion roubles:

  • On the Aeronet market, there have been approved some projects to create the first test site for unmanned aviation in Russia, the integration system of unmanned and manned aviation into a single airspace RUTM, the Kursir mobile flight test complex, the Sputniks small spacecraft platform, and the ERA cargo drone.

  • On the Marinet market, the project to create a platform for virtual simulation of crewless navigation received support. On the Autonet market, the second stage of the Avtodata project implementation was approved.

  • On the Energinet market, the ꓯPlatform distributed energy management project and the Rope-walker drone-based power grid maintenance system was approved.

  • On the Neuronet market, an open platform for voice assistants SOVA and a platform for virtual reality Virry Lifestyle.

  • On the Helsnet market, grant support was given to the project on the creation of the gene therapy anti-tumour drug AntioncoRAN-M in the Technet market — a digital solution for the production of wires based on high-temperature superconductors.

  • Within the Club Movement, some projects were launched to train personnel for the marine industry to conduct engineering competitions and contests in marine robotics.

At the end of the year, NTI projects created more than 240 results of intellectual activity, 20% of projects successfully completed the R&D stage and entered the first sales. The amount of private co-financing attracted to the projects amounted to 3.7 billion roubles.

In 2019, the first results of the NTI Competence Centres were summed up, the main task of which is the commercialisation of research results. A total of 14 Centres are working on more than 150 research projects, 12 of which were completed in 2019. More than 9 thousand specialists were trained in educational programs in the field of end-to-end technologies. At the end of the year, more than 350 participating companies entered the consortia of the NTI Competence Centres, and the centres' revenues exceeded 3.5 billion roubles.

In 2019, the first series of Up Great technological contests in the field of unmanned transport and hydrogen energy “Winter City” and “First Element” were completed. Eight teams took part in the final tests. The StarLine team demonstrated the best result in overcoming the technological barrier of the Winter City contest. The leaders of the First Element Contest became the Unmanned Helicopter Systems and Polytech teams. In July, a student competition in the field of machine vision technologies Ice Vision was successfully completed — A 48-hour hackathon, in which teams from six countries took part. In December, the acceptance of applications began for a new series of Up Great contests in the field of artificial intelligence with a prize fund of 200 million roubles.

As part of supporting high-tech business in 2019, RVC also completed the collection of applications for the ranking of fast-growing companies TechUspekh. The leaders of the rating were 110 companies with total revenue of 220 billion roubles. A feature of the 2019 rating was its focus on identifying fast-growing technological enterprises that are promising in the context of the NTI markets, and their projects that can be further supported through the NTI tools.

NTI Infrastructure

To remove regulatory barriers to the development of new markets and breakthrough products, in 2019, the implementation of normative “road maps” of NTI continued. The working groups developed 45 draft regulatory legal acts, 33 of which were approved, including federal laws, government, and international acts. In particular, in the direction of Aeronet, a Decree of the Government of the Russian Federation was adopted on the procedure for accounting for uncrewed aircraft weighing up to 30 kg, an experiment was launched on the Energy Market to manage the demand for electricity for retail consumers, a new order on the Helsnet market allowed the Russian Ministry of Health to reduce the time for state registration of biomedical products significantly.

In the area of normative and technical regulation in 2019, RVC with the support of the Ministry of Industry and Trade of the Russian Federation and Rosstandart initiated the creation of the Technical Committee 164 “Artificial Intelligence”, whose responsibilities included a wide range of issues related to the regulation of the applied use of AI technologies. In December, the first two national standards in this field: GOST R 58776-2019 “Means of Monitoring Behaviour and Predicting People's Intentions. Terms and Definitions” and GOST R 58777-2019 “Air Transport. Airports. Technical Means of Inspection. Methodology for Determining Indicators of the Quality of Recognition of Illegal Investments from Shadow X-ray Images.”

More than 40 new national standards in the field of digital technologies in 2019, together with market players, initiated Technical Committee 194 “Cyber-physical systems” based on RVC. The most important event was the development and approval by the Ministry of Industry and Trade of the Russian Federation and Rosstandart of the first state medium-term planning document in the field of normative and technical regulation of digital technologies — the long-term standardization plan for 2018–2025. In 2019, the efforts of the shopping centre also officially approved the first national standard in the field of the Internet of Things — it became the IoT Protocol NB-Fi, developed in Russia. International experts supported another draft of the IoT standard as a complete protocol of the LoRaWAN family. The expansion of the membership of the committee and its working groups continued — by the end of 2019, their number exceeded 100 organizations.

In 2019, RVC also provided expert, methodological, and organizational support to the innovation communities of the regions with a view to their involvement in the NTI implementation. The methodological basis for this was developed by RVC “Regional Standard” NTI — a set of recommendations for authorities and leaders of regional business communities on the development of NTI projects and supporting services.

Educational Direction

During the year, RVC, together with partners, implemented a number of projects aimed at developing talents for new technology markets — schoolchildren, students, and young entrepreneurs.

In April 2019, the results of the NTI Olympiad final school tests were summed up in 19 engineering profiles. More than 1,000 children from all over Russia took part in them, and 159 winners from 37 regions received 100 USE points for admission to leading engineering universities. In the new season, within the framework of the Olympics, a direction was opened for students of grades 5–7 for the first time. To participate in the competitions of the 2019/2020 academic year already received more than 80 thousand applications.

For the second year running, an all-Russian NTI Class campaign took place in schools, which was joined by more than 1.5 thousand educational institutions across the country. The goal of the program is to acquaint school students with NTI, tell them about future professions and involve them in solving actual engineering problems.

To develop the entrepreneurial competencies of students, RVC continued the introduction of the training course “Innovative Economics and Technological Entrepreneurship”. In 2019, the course was implemented at 41 universities, more than 7 thousand students attended the training. Besides, together with the First MGMU named after Sechenov, RVC began the development of the specialized version of the course for medical universities. The students of the course will learn to develop their projects and work on the commercialisation of technologies in the field of medicine, pharmaceuticals, and healthcare. The testing of the industry version of the course and its replication to regional medical universities will be carried out in 2020.

In 2019, five years marked the first graduation of students of the RVC Base Department at the Moscow Institute of Physics and Technology “Technology Project Management”. During this time, over 100 undergraduates became graduates of the department, more than 20 teachers were involved — employees of venture funds and technology companies. In 2019, the RVC Basic academic department in partnership with the Russian Quantum Centre and NITU MISiS was developed and implemented in a network form — Master Program “Project Management in the Field of Quantum Communications”, as well as three commercial continuing education programs. Today, the competition for admission to the department is six people per place.

Community Development

In 2019, RVC initiated a large-scale project for the development of Rukami's technical creativity. During the year, in 10 regions of Russia, maker festivals visited by more than 40 thousand guests, took place. The project also launched a practice exchange program for resource centres — a set of activities aimed at creating a new type of technology clubs involving children and young people in the technology enthusiast community. In total, about 3 thousand people took part in the initiatives of the program.

The All-Russian Competition for Innovative Journalism Tech in Media was successfully held for the ninth time. This season, its tracks were dedicated to the markets and technologies of the National Technology Initiative. The competition received 674 entries from authors from 51 regions of Russia; the winners received cash prizes for 100 thousand roubles.

In December 2019, together with the NTI Platform and with the support of the Government of the Russian Federation, for the first time, the Global Technology Leadership Forum held by RVC in Sochi, bringing together as many as 1,5 thousand participants. The central theme was the formation of state technological policy at the turn of the 2020s. The Forum will host stress tests and presentations of roadmaps for the development of high-tech areas based on end-to-end technologies, strategic sessions with the participation of state corporations, presentations of technology consortia, and events of the National Technology Initiative community.

In addition, RVC traditionally acted as a co-organizer of the Open Innovation Forum. At the interactive stand of RVC — Global Connection Hub, discussions were held on issues of artificial intelligence, big data, the dynamics of the Russian venture market, and standards for the Internet of Things. A separate area of the stand was dedicated to the Up Great contest “Winter City”. Up Great teams, NTI projects, GenerationS start-ups, and portfolio companies of RVC funds presented their products at the forum exhibition.

In the field of international cooperation, in September 2019, Shanghai hosted the IV Russian-Chinese Forum — Investing in Innovation, which brought together more than three hundred representatives of companies and funds of the two countries. The Forum guests discussed issues of joint commercialisation of innovative products and the creation of venture capital funds. A separate thematic track of the Forum was artificial intelligence.



GENERATION S

In 2019, GenerationS, an innovation development platform from RVC, continued to work in partnership with major Russian and foreign companies. The international energy company became corporate customers of acceleration programs Enel State Transport Leasing Company (STLC), the global giant of the FMCG industry — PepsiCo, a Swiss company — Ferring pharmaceuticals and others. Over 500 companies from around the world took part in the selection. In 2019, graduates of past corporate programs launched more than 30 commercial pilot projects with large corporations.

GenerationS has also expanded its corporate product line: it included various online and full-time educational programs, innovative audit services, and the formation of a creative strategy.

Within each corporate accelerator, GenerationS forms an ecosystem of international partners that create opportunities for both participating start-ups and the corporation itself. The funnel of international start-ups GenerationS has also expanded. In 2019, the number of foreign applications in the selections exceeded 15% of the total. The leading countries are Belarus, Kazakhstan, Ukraine, and Armenia. However, the GenerationS acceleration programs are also interesting for technological projects from Germany, Finland, Israel, France, Estonia, and Singapore. This year #GENSTalks events abroad were held in Kazakhstan, Estonia, and Germany.

In 2019, the GenerationS accelerator entered the top 5 best state accelerators in the world, according to research by an analytical company — UBI Global. The experts noted the exceptional achievements in the development of the ecosystem for start-ups, the attractiveness of the acceleration program, and the accomplishments of its graduates.



Information

About RVC

RVC is a governmental fund of funds, the Institute of Development of the Russian Federation. The main objectives of RVC to stimulate the creation of Russia's own venture capital industry and execute functions of the Project Office of the National Technology Initiative (NTI). The authorized capital of RVC is more than 30 billion roubles. One hundred percent of the RVC capital belongs to the Russian Federation represented by the Federal Agency for Management of State Property of the Russian Federation (Federal Property Management Agency). The total number of funds formed by RVC has reached 29; their overall size is 64.4 billion roubles. The share of RVC is 37.3 billion roubles. The number of portfolio companies of RVC funds is 180. The total amount of monetary funds approved for investment is 15.9 billion roubles.
www.rvc.ru

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