Russian venture capital funds started investing more actively and significantly increased the number of deals in 2013. The Firrma.ru portal and the PwC consulting company analyzed the activities of domestic funds and identified the most interesting trends in this market sector.
The researchers used data provided by the foundations themselves and information published in open sources. The rating was compiled for old and new funds that appeared on the market less than a year ago.
The authors of the rating say they wanted to select the highest quality venture funds that demonstrated the best return on investment (ROI) and were active in 2013.
After analyzing the Russian venture capital market, PwC experts note that the market structure remains isolated and closed. Fund managers know each other well and regularly hold joint events, but they are little known in other areas of the business. In 2013, innovative startups attracted 18 percent more investment, totaling $ 142 million. At the same time, the number of investment transactions increased by 45 percent and amounted to 98. In 2013, Russian venture funds focused on working with portfolio companies and debugging internal processes. The transparency indicator of the Russian market is 60-70 percent, and investment volumes are unevenly distributed over time, which is typical for developing countries.
Runa Capital became the absolute leader in terms of the number of investment deals concluded. Representatives of Runa Capital believe that the expansion of the market and the high interest of investors in new projects in Russia helped them achieve these indicators.
Among the funds that have been working for less than a year, the Internet Initiatives Development Fund became the leader, which supported 34 projects. Venture funds ImpulseVC and Genezis Capital also showed good performance, with 15 and 9 projects in their portfolio, respectively.
Researchers note that 70 venture funds are operating in the Russian market, of which 25 percent are new players. New foundations have different histories and were created by people with financial background or IT professionals. The model of venture capital funds in Russia follows the structure of similar funds in the United States. Project selection criteria and work with portfolio teams have an international basis. However, Western funds invest over $ 1 million in startups in one deal and therefore successfully compete with venture capitalists. Russian funds work more with seed projects and are more likely to invest in startups that have come out at the stage of launching sales or testing a business model.