Consolidation of Participants in the Venture Capital Market Tends to Continue
On June 30, the 11th annual forum of innovative InfoSpace technologies, organized by the Initiative Center for Business Support and Development, took place. Deputy General Director - Investment Director of RVC Aleksei Basov spoke at the plenary session “Digital Leadership. Strategies, Human Resources, Technologies” with a report on the current situation in the venture capital market and on measures to support RVC for technology companies.
The plenary session was also attended by Igor Drozdov, Chairman of the Board of the Skolkovo Foundation, German Klimenko, Chairman of the Board of the Digital Economy Development Fund, Rachik Petrosyan, Director for Digital Transformation of Rostekh State Corporation, and Dmitry Kurochkin, Vice President of the Russian Chamber of Commerce and Industry. Vice-President of the Higher School of Economics Igor Agamirzyan was the event moderator.
According to Alexei Basov, the long-term growth of the venture capital market was interrupted by the coronavirus pandemic. The depth of the consequences can be fully assessed much later.
“At the same time, there is still no significant drop in the volume of transactions only because the essence of the market is made up of large transactions, or mega-rounds, with a size of more than $100 million, and also because the American market entered the crisis in the second quarter, and there is no statistics on that so far”, says Aleksei Basov.
The crisis has already affected investors' ability to exit investments: most of the outputs were frozen or adjusted.
“The exits of venture investors and funds have significantly decreased and rolled back several years ago,” noted Aleksei Basov. The longer-term effects, which we will probably have to observe, are associated with the non-launch of funds. We see how the number of new funds has rapidly adjusted, continuing the general trend towards a decrease in the number of instruments and increasing volume. The vector to enlarge the players will continue, and the market will not receive a significant amount of funds whose launch was postponed.”
Today, the state sees problems, and seeks to build up the market with liquidity, creates new support formats to overcome the crisis. State funds are adjusting mandates with an emphasis on digitalization.
“RVC actively participates in this process not only with capital and investment experience but also through direct support instruments. One of such tools is Digital RVC, said Aleksei Basov. It is a platform through which Russian tech companies can access RVC's current support measures in a one-stop-shop format. There are now nine support packages on the platform. “The information is structured so that everyone can quickly find their bearings and find the best option for themselves,” said Aleksei Basov.
At the end of his speech, Aleksei Basov spoke about the results of the study “Map of Digital Economy Companies.”
“The map contains an analysis of about four hundred small and medium-sized companies in the creation and commercialization of products and services based on end-to-end technologies with revenues ranging from 100 million to 10 billion roubles. The study helps to navigate the landscape of the market and create a portrait of typically small and medium-sized companies that are actively developing digital technologies and can act as suppliers of solutions for various kinds of consumers,” concluded Aleksei Basov.