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(English) Russian venture market grows but remains modest by international standards

06 ноября 2019

(English)

Venture investment volume in Russia reached almost half a billion US dollars ($493.6 million) in the six first months of this year, according to Dsight. This Moscow-based venture analytics and business intelligence agency released last week the English version of its latest industry report.

While still modest by international standards (US venture deals accounted for some $55 billion over the same period), these numbers show a substantial increase (+25%) from the previous year.

In an exchange with East-West Digital News, Dsight co-founder Arsenyi Dabbakh summarized the current trends as follows:

  • The market is stable and growing. While deal volume increased by 25% year-on-year in H1 2019, the number of deals decreased in a similar proportion. This indicates that investors are shifting to later stages, betting on more secure and mature companies. Thus, the average deal amount is up, reaching $4.5 million.
  • Investors’ preferred segments are B2C IT / Internet services, including e-commerce, logistics, online audio-video and edtech.
  • The market is stable on exits (14 in H1 2019, a slight decrease y-o-y; probably a bit more than 30 during the whole year).
  • The most active investor categories are traditional VCs and corporations acting as CVC and acquiring, in most cases, minority stakes.
  • Corporate activity (investment volume) increased by more than 40%
  • Almost no investment was made in biotech and industrial tech, putting aside investments from state funds and a few individual investors.
  • Russian or Russian-founded companies made significant deals: HeadHunter’s IPO on the NASDAQ (over $200 million), Ozon’s $150 million private equity deal, Avito’s acquisition by Naspers ($1.16 billion); Veeam’s deal with Insight Venture ($500 million); the exits of Nginx and Luxsoft. Most of these deals were not included in the stats for methodological reasons.
  • Six fund creations of over $100 million were announced in 2019; while several traditional or captive VCs were established ($30 million-$50 million.

Thus, the Russian VC market remains modest in spite of considerable government support. Corporations have been the driving force this and probably next year. Exits tend to stimulate the creation of new funds. The number of business angels seems to be growing, too, even though a substantial part of their deals are not made public.

Two other venture reports covering the same period were released (in Russian only) in the past two months. Due to methodological differences, their numbers differs from those of Dsight (see table below).

An in-depth review of venture investment in the field of e-commerce is available in EWDN’s latest industry report.

Russian venture activity in H1 2019 / H1 2018 according to PWC-RVC, Dsight and Inc.

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