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Russian Venture Capital
Market Overview
4Q 2013 and Annual Summary
IN PARTNERSHIP WITH
IN PARTNERSHIP WITH
Contents
2
Welcome.......................................................................................
•
3
Dear friends,
We are pleased to present this new issue of the Russian Venture Capital
Market Overview by RMG Securitie...
IN PARTNERSHIP WITH
About Rye, Man & Gor Securities
Rye, Man and Gor Securities (RMG) is an independent Russian
investment...
IN PARTNERSHIP WITH
About East-West Digital News
When I arrived in Russia five years ago to work in a
Western venture fund...
Russia’s venture capital
market: the 2-minute tour
6
Seed
Startup
Growth
Expansion
Total
Deal count VC invested, $M
Averag...
IN PARTNERSHIP WITH
Trends on the VC market
7
• After the 2012 boom, investors in the Russian VC market have become
more c...
IN PARTNERSHIP WITH
VC market overview
98 167 335 132 149 87 71 99
60
55
50
10
52
83
88
101
90
86
97
72
53
99
128
0
20
40
...
IN PARTNERSHIP WITH
Exits and large deals
Two exits were completed in 4Q 2013. Kinopoisk.ru,
a website dedicated to cinema...
IN PARTNERSHIP WITH
42
22
28
15
61
21
98
1Q 2Q 3Q 4Q
Source: RMG
76
13
72
10
49
26
64
25
72
51
93
126
2013
98
8885
93
2012...
IN PARTNERSHIP WITH
30
11
116
48
140
90
204
9830
33
70
22
31
60
24
17
10
10
23
12
0
50
100
150
200
250
300
2012 2013 2012 ...
IN PARTNERSHIP WITH
Biotech
16,5%
Industrial tech
3,6%
Software / Internet - B2B
11,6%
Software / Internet - B2C
39,8%
Oth...
IN PARTNERSHIP WITH
2 13
2 12
VC market structure: sectors
13
Source: RMG
Consumer Internet is the mainstay of the Russian...
IN PARTNERSHIP WITH
Private funds Corporates Public PPP Business angels
VC market structure: rounds
14
Less in, more out
S...
IN PARTNERSHIP WITH
7,7
4,9
15 15
2012 2013
VC invested, $M
Deal count
Diagnostics &
research
18,7%
Medical
equipment
33.6...
IN PARTNERSHIP WITH
8,3
0,1
10
1
2012 2013
VC invested, $M Deal count
41,8
6,3
27
13
2012 2013
Green Tech
0,2%
Laser Tech
...
IN PARTNERSHIP WITH
Enterprise management
software
36,0%
Marketing/Advertising
48,1%
Other business software
1,0%
Platform...
IN PARTNERSHIP WITH
Content Providers
10,3%
E-commerce
76,9%
Education
1,6%
Finance
2,1%
Gaming
0,4%
Search/Recommendatio
...
IN PARTNERSHIP WITH
Methodology
For the purposes of this report, ‘venture capital
investments’ stand for investments of up...
IN PARTNERSHIP WITH
Contacts
We are very interested in the opinion of our readers, so if you are an investor,
a venture en...
21
Any information and opinions contained in this analytical document (hereinafter – the “Analytical Materials”) are publi...
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Russian Venture Capital Market Overview 4Q2013

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We are pleased to present the new issue of Russian Venture Capital Market Overview, produced in partnership with East-West Digital News, offering a detailed analysis of Russia's VC market in 4Q 2013 and featuring the main trends of 2013. Our aim in this report is to help make the Russian VC market more transparent and understandable, and thereby contribute to its growth.

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Transcript of "Russian Venture Capital Market Overview 4Q2013"

  1. 1. Russian Venture Capital Market Overview 4Q 2013 and Annual Summary IN PARTNERSHIP WITH
  2. 2. IN PARTNERSHIP WITH Contents 2 Welcome........................................................................................................................... About Rye, Man & Gor Securities ....................................................................................... About East-West Digital News ........................................................................................... Russia’s venture capital market: the 2-minute tour ............................................................ Trends on the VC market ………….................................................................................... VC market overview........................................................................................................... Exits and large deals ......................................................................................................... VC market structure ......................................................................................................... Biotech ............................................................................................................................. Industrial tech ................................................................................................................... Software / Internet – B2B ................................................................................................. Software / Internet – B2C ................................................................................................ Methodology .................................................................................................................... Contact information ......................................................................................................... 3 4 5 6 7 8 9 10 15 16 17 18 19 20
  3. 3. • 3 Dear friends, We are pleased to present this new issue of the Russian Venture Capital Market Overview by RMG Securities, prepared in partnership with East-West Digital News, offering a detailed analysis of Russia’s VC market in 4Q2013 and a summary of trends last year. Although the amount of venture capital invested fell sharply year-on-year in 2013, the cloud did not come without a silver lining. Venture investors have become more prudent in choosing portfolio projects; state-backed support programs for early-stage technology companies are in full swing; and exits have become more frequent, with the absolute value of exit deals in 2013 beating the figure for 2012. Last but not least, co-investment and syndicated investing are gradually becoming more popular among venture capitalists on the Russian market. However, the VC market could not fail to be affected by overall stagnation of Russia’s economy last year, making it harder to cure some of its chronic ills, which include absolute dominance of IT to the detriment of biotech and industrial tech, lack of foreign involvement and a low number of corporate venture funds. Our aim in these Reports is to help make the Russian VC market more transparent and understandable, and thereby contribute to its growth. In this issue we are particularly pleased to welcome East-West Digital News as our new partner in achieving these objectives. Arseniy Dabbakh Director, Corporate Finance Rye, Man & Gor Securities IN PARTNERSHIP WITH
  4. 4. IN PARTNERSHIP WITH About Rye, Man & Gor Securities Rye, Man and Gor Securities (RMG) is an independent Russian investment company. RMG has been on the market for 20 years, in which time it has earned an excellent reputation among both clients and peers as a reliable partner. RMG provides a wide range of services to Russian and foreign clients in the venture capital market, including: – search for promising target assets; – capital raising through public or private offerings; – search for strategic investors and M&A deal support; – venture project support, including strategy development and measures to increase capital-raising potential; – advisory on deal structuring and financing, deal processing, negotiations, and due diligence of target companies. Rye, Man & Gor Securities is a member of the National Alternative Investment Management Association (NAIMA). NAIMA is a non-profit partnership representing alternative investment firms and service providers committed to the growth of long-term capital in Russia. Its major targets are: – raising awareness of the alternative investment sector among asset allocators, regulators and entrepreneurs; – creating a more favorable legal environment for direct investments; – promoting Russian private equity and venture capital in the global limited partner/general partner community and setting professional standards for further development of this market. 4
  5. 5. IN PARTNERSHIP WITH About East-West Digital News When I arrived in Russia five years ago to work in a Western venture fund, the local market was just nascent. Twenty funds at most, including Russian ones and a handful of foreign investors, were active. Skolkovo was just a field on the outskirts of Moscow (the project was announced in late 2009), and I can remember just one startup incubator in Moscow. Since then the industry has seen some dramatic developments. Startups, funds, technoparks, incubators, accelerators of all kinds have been springing up like mushrooms – not only in Moscow, but also in a range of important cities such as Kazan, St. Petersburg, Nizhny Novgorod, Novosibirsk and further on to Russia's Far East. As an illustration, more than one thousand projects from all over Russia compete every year at BIT, Russia's largest startup contest, compared with seventy when the contest was created in 2003 and two hundred in 2009. In 2010-2012, the volumes of Russia's venture became significant, approaching one billion dollars – far behind those of China and India, but the magnitude was comparable to that of the US market in segments like e-commerce. The recent decrease in total investment volume is perhaps a sign of maturation, as witnessed by investors' growing interest in later stage investments and the multiplication of exits. Yet this market is just starting to know itself. There are just a few analytical reports of varying quality on this topic, while coverage by international venture databases its still far from exhaustivity. As a result, Russia still looks almost like terra incognita in the eyes of global investors. At East-West Digital News, we found that RMG's coverage of this market was the most complete and accurate among available sources. This is why we have decided to support this initiative, in line with our mission of informing the global business community objectively and reliably of developments in Russia's innovative industries. May this groundbreaking effort contribute to improve investment efficiency and the level of mutual trust and transparency for the global business community. May it also contribute to developing business ties between two worlds that are sometimes tempted to turn away from each other. 5 Adrien Henni Editor-in-Chief East-West Digital News East-West Digital News is the first international information company dedicated to Russian digital industries. Its website EWDN.COM provides news, market data, business analysis and updates pertaining to the Internet, e-commerce, mobile and telecom markets, software and hardware innovation, as well as to the related investment activity and institutional environment. The company also provides in-depth industry reports on these topics. A consulting branch, East-West Digital Consulting, provides international players with assistance for business development in Russia and advises Russian companies on their international strategies. Dear readers,
  6. 6. Russia’s venture capital market: the 2-minute tour 6 Seed Startup Growth Expansion Total Deal count VC invested, $M Average deal value, $M Investor structure 229 261 59 87 0.25 0.33 72 74 110 197 1.5 2.7 24 20 129 184 5.4 9.2 17 9 107 264 5.3 29.3 342 364 405 732 1.2 2.0 Private investors Public funds Corporate PPP Business angels Direction of change 2013 2012 Count 10 10Exits 223 175 Value, $M IN PARTNERSHIP WITH
  7. 7. IN PARTNERSHIP WITH Trends on the VC market 7 • After the 2012 boom, investors in the Russian VC market have become more cautious in choosing projects for their portfolios. In general, venture investors in Russia are becoming more experienced, professional and prudent. • The state is stepping back in favour of private venture funds. State funding is mainly focused on early-stage biotech and industrial tech projects. • Exits from successful projects have become more frequent, although exits by private funds are still not numerous. The total value of exit deals in 2013 was higher than in 2012, thanks to several large transactions. • Total venture capital invested in 2013 fell by 31% year-on-year as the venture euphoria of 2012 ended and the overall economic conditions in Russia worsened. • Russia’s VC remains IT-oriented. Biotech and industrial tech projects accounted for less than 20% of total capital invested in 2013, matching the share in 2012. • Interest of Western venture funds in Russian companies remains low and restricted to a few e-commerce projects. The main reasons for this are lack of information about the Russian venture market, weak business contacts and an unfavourable investment climate. The poor investment climate remains one of the biggest issues hindering growth of Russia’s economy. Among the positive trends are an increase in the number of syndicated deals, which is indicative of a more mature market where players are ready to share both profits and risks, and a move towards fund specialization, with more VC funds willing to find an attractive niche to invest in rather than “play roulette”. Some negative trends include the scarcity of capital available for investing: some of the Established institutional investor types are absent from the Russian market, while local high net worth individuals still prefer to invest by themselves instead of entrusting professionals with this task. Alexey Solovyov, Managing director at Prostor Capital
  8. 8. IN PARTNERSHIP WITH VC market overview 98 167 335 132 149 87 71 99 60 55 50 10 52 83 88 101 90 86 97 72 53 99 128 0 20 40 60 80 100 120 140 0 50 100 150 200 250 300 350 400 450 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 Russia’s VC deal flow Exits Base market Deal count 8 Warm end to a year of cooling Source: RMG US$ million, excl. deals closed Source: RMG I think 2014 would be an even smaller year. The trend of consolidation and decrease in the overall number of venture funds (but an increase in the number of mature ones) would continue. The deals which would be happening would be larger. Also, Russia’s internal consumption of Russia-made high-tech would continue to grow, driven by various reasons – including military and governmental spending and incentives – that would perhaps influence the funding patterns. Serguei Beloussov, venture investor, CEO at Acronis After the slowdown of investment activity in mid-2013, 4Q turned out to be the most successful quarter of the year in terms of both VC invested and deal count. Russian venture companies received $99M of financing in 126 deals, and two exits were worth a further $88M in total. As expected, total capital invested declined y-o-y in 2013 from $907M in 2012 to $622M, i.e. by 31%. Nevertheless, there were some causes for celebration. The total amount of exits increased both in absolute terms ($223M compared with $175M in 2012) and relative to market size. 732 399 175 223 0 200 400 600 800 1000 2012 2013 VC invested Base market Exits US$ million Source: RMG We believe that, to a large extent, the 2012 boom reflected activity by inexperienced and incautious investors. The correction in 2013 was associated with an improvement of investment quality.
  9. 9. IN PARTNERSHIP WITH Exits and large deals Two exits were completed in 4Q 2013. Kinopoisk.ru, a website dedicated to cinema, was acquired by Yandex from the French strategic investor Allociné, which held a 40% stake, and from Russian founders for a total of $80M. We note that Allociné had previously bought its stake from Yuri Milner’s DST Group in 2009 for a price that implied total valuation of only $3-5M. Elsewhere, a syndicate consisting of Addventure, Phenomen Ventures and Guard Capital funds acquired Delivery Club, an IT platform for more than 100 delivery firms, from its founders for $8M. Other large transactions included an SPO on NYSE by Luxoft, the IT outsourcing subsidiary of IBS Holding, which raised $95M. Luxoft cannot be considered a venture project due to its size and business model, so this placement was not included by us in the total amount of VC invested in Russia, but it sets an example to Russian IT startups of what a successful local IT company can achieve. A $20M round closed by Dauria Aerospace, a satellite developer, with Ilya Golubovich’s I2BF fund is particularly inspiring, since it shows that international funds can made inroads in Russia beyond the IT sector, in sectors that have previously depended almost entirely on state financing 9 Company name Business description Investor Exiting stakeholder Deal value, $ million Sector Exits Kinopoisk Thematic website dedicated to cinema Yandex Allociné, founders 80 Software/ Internet , B2C Delivery Club Platform for delivery agencies Addventure, Phenomen Ventures, Guard Capital Founders 8 Software/ Internet , B2B Large deals Luxoft IT outsourcer SPO on NYSE 95 Other IT Dauria Aerospace Space satellite developer I2BF Global Ventures 20 Promtekh Source: RMG 4Q 2013 results
  10. 10. IN PARTNERSHIP WITH 42 22 28 15 61 21 98 1Q 2Q 3Q 4Q Source: RMG 76 13 72 10 49 26 64 25 72 51 93 126 2013 98 8885 93 2012 1Q 2Q 3Q 4Q VC investors were better disposed towards late- stage projects in 2013, with 41 deals at the growth and expansion stages last year compared to 29 in 2012, while the number of early-stage deals declined from 335 to 301. Investor interest in more mature projects is understandable: risks are not as high as at the seed or startup stages, the business model has most likely already proved to be successful, and the company is generating, or is close to generating, positive cash flows. Meanwhile, the lack of early- stage financing remains an issue for the Russian venture industry, despite efforts by state development institutions. Venture capital is increasingly interested in late stages VC market structure: stages 10 20 24 9 17 7274 229261 364 342 Deal count by quartersInvestor enthusiasm for the Russian VC market cooled at the beginning of 2013, but the total number of deals closed in the year as a whole was only 6% less than in 2012. The market appears to have reached its lows in summer 2013, and we expect results in 2014 to be better than in 2012. VC deal count by stage 2012 2013 Seed Startup Growth Expansion Source: RMG
  11. 11. IN PARTNERSHIP WITH 30 11 116 48 140 90 204 9830 33 70 22 31 60 24 17 10 10 23 12 0 50 100 150 200 250 300 2012 2013 2012 2013 2012 2013 2012 2013 Private funds Public Corporate PPP Business angels VC market structure: stages 11 Investor activity by stage VC invested, US$ million Source: RMG Amounts of capital invested declined at all stages Seed Startup Growth Expansion 87 59 197 110 184 129 264 107 Although the number of venture rounds closed in 2013 went down at the early stages but up at the late ones, the amounts of capital invested decreased across all stages. The decline was particularly severe for expansion-stage companies, which received 48% less financing than a year ago. 0,33 2,7 9,2 2,0 0,26 1,5 5,4 6,3 1,2 Seed Startup Growth Expansion Total 2012 2013 Average deal value by stage Source: RMG 29.3 US$ million Reduced role of the state on the VC market, especially at late stages, was a major trend in 2013. In 2012, government institutions accounted for 20% of late-stage financing, but the share in 2013 was only 2%. Nevertheless, state financing remains important for startup companies and the state increased its share of all capital invested at the seed stage from 34% to 56%. Average deal value declined along with total invested capital. The market average for a VC deal in 2012 was $2M, but that figure was down to $1.2M lat year. The average deal value will continue to decrease as the number of seed deals is and will be growing faster than the amount of overall VC invested. Alexey Solovyov, Managing director at Prostor Capital
  12. 12. IN PARTNERSHIP WITH Biotech 16,5% Industrial tech 3,6% Software / Internet - B2B 11,6% Software / Internet - B2C 39,8% Other IT 28,5% Biotech 0,2% Software / Internet - B2B 9,3% Software / Internet - B2C 90,2% Other IT 0,3% Biotech 32,0% ICT 3,4%Industrial tech 28,4% Other technologies 1,8% Software / Internet - B2B 17,7% Software / Internet - B2C 15,3% Other IT 1,3% Biotech 1,8% ICT 8,4% Industrial tech 0,2% Software / Internet - B2B 30,3% Software / Internet - B2C 59,3% ICT 0,1% Industrial tech 9,3% Software / Internet - B2B 17,2% Software / Internet - B2C 71,3% Other IT 2,2% VC market structure: investors 12 Internet is the preserve of private investors The “division of labour” between private and public investors, which is a distinguishing feature of the Russian VC market, was reinforced in 2013. On the private side, private venture funds and corporates directed 90% and 69% of all their capital to the IT sector, respectively, and our data suggest that Russian business angels only invested in Internet and IT in 2013 (deals by business angels are the least transparent in the market and many of them remain unannounced, but it is safe to assume that such investors take little interest in non-IT industries). On the public side, technology-oriented projects are mainly backed by the government agencies such as Skolkovo, Russian Venture Company (RVC), regional seed funds, etc. In 2013, 66% of all investments made by such institutions went to the industrial tech and biotech sectors. Private funds $247.6M Public $60.8M PPP $36.3M Corporate $37.0M Business angels $23.6M Source: RMG VC invested by investor type and sector IT and Internet will remain the most attractive and financially receptive sector for investors due to its immense growth potential and the number of free unoccupied niches, especially in the B2C sphere. Alexey Solovyov, Managing director at Prostor Capital
  13. 13. IN PARTNERSHIP WITH 2 13 2 12 VC market structure: sectors 13 Source: RMG Consumer Internet is the mainstay of the Russian venture environment Biotech 6,4% ICT 1,3% Industrial tech 9,5% Other technologies 0,3% Software / Internet - B2B 17,5% Software / Internet - B2C 61% Other IT 4% VC invested by sector Last year brought no significant changes in the sector structure of Russia’s VC market: IT accounted for about 83% of total capital invested in both 2012 and 2013. So IT remains the mainstay of the Russian venture capital environment. However, there was some movement within the IT sphere. Investors became more interested in B2B solutions, which received 17.5% of VC invested compared to 6.6% a year earlier. While B2C Internet projects still form the core of Russia’s venture environment, investors are starting to explore other options to diversify their portfolios, as this sub-sector is showing signs of capital saturation. $732M ($907, including exits) $405M ($622, including exits) Biotech 3,8% ICT 2% Industrial tech 11% Other technologies 0,6% Software / Internet - B2B 6,6% Software / Internet - B2C 66,3% Other IT 9,8%
  14. 14. IN PARTNERSHIP WITH Private funds Corporates Public PPP Business angels VC market structure: rounds 14 Less in, more out Seed A B C+ Exit VC investments by round 2012 2013 Most of the decline of VC amounts invested in 2013 was in B+ rounds. By contrast, round A saw y-o-y growth. Funds raised in exit deals went up in absolute terms from $175M to $223M due to activity by corporate investors, who accounted for 70% of all exit proceeds. Corporates, both independently and through corporate venture funds, took a more active role in the VC market in general. Although there are still only a few corporate venture funds in Russia, several Russian companies have announced plans to set up such funds, including Rostelecom, QIWI, Rushydro etc. 65 62 430 175 175 53 83 246 23 223 Source: RMG VC invested, US$ million Last year, seed rounds were scarce in the market since there was hardly anyone to invest in them. Some private funds had ceased to exist and others had completed their investment cycle. At the same time, the market realized the need to accelerate seed-stage projects, and the forming of autonomous Internet entrepreneurship ecosystems in the Russian regions has become an important trend. Regions outside Moscow and St. Petersburg are becoming the new source of venture projects. Kirill Varlamov, Director at Internet Initiatives Development Fund
  15. 15. IN PARTNERSHIP WITH 7,7 4,9 15 15 2012 2013 VC invested, $M Deal count Diagnostics & research 18,7% Medical equipment 33.6% Pharmaceuticals 47,7% Biotech 15 Diagnostics & research 27,4% Healthcare 16,4% Medical equipment 10.7% Pharmaceuticals 45,6% 2012 $28.1M 2013 $26.2M 4,6 0,01 0 2012 2013 3,0 8,8 6 7 2012 2013 12,8 12,5 11 7 2012 2013 Diagnostics & research Medical equipment Healthcare Pharmaceuticals No news is good news
  16. 16. IN PARTNERSHIP WITH 8,3 0,1 10 1 2012 2013 VC invested, $M Deal count 41,8 6,3 27 13 2012 2013 Green Tech 0,2% Laser Tech 0,7% Nanotech 13,4% Power Supply Tech 17,7% Robotics 1,4% Satellites & Space 51,4% Other Industrial Tech 15,1% Industrial tech 16 Green Tech 10,3% Laser Tech 2,3% Nanotech 1,2% Power Supply Tech 23,1% Robotics 0,0%Satellites & Space 11,4% Other Industrial Tech 51,7% 1,9 0,3 3 2 2012 2013 1,0 5,6 1 5 2012 2013 18,7 7,4 10 12 2012 2013 0,03 0,6 2 1 2012 2013 9,2 21,5 12 4 2012 2013 Clean tech Laser tech Nanotech Power supply tech Robotics Satellites & space Other industrial tech 2012 $80.9M 2013 $61.7M Brownian motion
  17. 17. IN PARTNERSHIP WITH Enterprise management software 36,0% Marketing/Advertising 48,1% Other business software 1,0% Platform/Middleware 9,2% Other B2B software 5,6% Enterprise management software 24,2% Marketing/Advertising 35,6% Other business software 16,0% Platform/Middleware 0,3% Other B2B software 24,0% Software / Internet – B2B 17 2012 $48.1M 2013 $61.9M 17,3 17,1 13 9 2012 2013 VC invested, $M Deal count 23,1 25,2 18 38 2012 2013 2,7 11,3 6 29 2012 2013 0,5 0,2 4 6 2012 2013 4,4 17,0 7 12 2012 2013 Enterprise management software Marketing / Advertising Other business software Other B2B software Platform / Middleware A welcome alternative to B2C
  18. 18. IN PARTNERSHIP WITH Content Providers 10,3% E-commerce 76,9% Education 1,6% Finance 2,1% Gaming 0,4% Search/Recommendatio ns 4,6% Social Media 2,9% Other B2C Internet services/software 1,2% Content Providers 2,7% E-commerce 55,4% Education 8,2% Finance 12,5% Gaming 3,9% Search/Recommendations 10,1% Social Media 4,7% Other B2C Internet services/software 2,6% Software / Internet – B2C 18 49,8 6,5 16 10 2012 2013 VC invested, $M Deal count Content providers 372,8 135,0 65 43 2012 2013 E-commerce 7,7 19,9 10 16 2012 2013 10,3 30,4 10 14 2012 2013 Education Finance 22,1 24,5 32 34 2012 2013 Search / Recommendations 14,1 11,4 23 14 2012 2013 6,0 6,3 11 16 2012 2013 Social media Others 2,1 9,6 3 6 2012 2013 Gaming Diversifying from E-commerce 2012 $485M 2013 $243M
  19. 19. IN PARTNERSHIP WITH Methodology For the purposes of this report, ‘venture capital investments’ stand for investments of up to $100M in high-risk and potentially highly profitable technological projects. Only VC investments in companies whose operations are focused on the Russian market were included in calculation of the market size. Companies financed by Russia-based investors, but oriented to foreign markets are not included in the analysis. Grant financing was included in the calculation of market size as, although grants are non-repayable, they are used to finance commercial VC projects and thus represent an inflow to the VC economy. An ‘exit’ stands for a deal in which at least one investor exits a venture company’s capital. For the purposes of this report, 4 stages of a VC project development are distinguished: 1. Seed: the project exists only as an idea or laboratory research. 2. Startup: a company is in the process of organization or has conducted operations for some time but sales have been minimal or zero. 3. Growth: launch of marketing and regular sales of a new product.. 4. Expansion: a company increases its sales, market share, output etc. We distinguish 7 sectors: Biotech; Industrial Tech; Computer Tech and Equipment; Other Tech; Software/Internet B2B; Software/Internet B2C; Other IT. The first 4 sectors comprise the Tech macrosector and the rest comprise the IT macrosector. These 7 sectors subdivide as follows. Biotech: healthcare, pharmaceuticals, diagnostics and medical equipment development. Industrial tech: laser, energy, green, aerospace technologies, robotics and other technologies designed for industrial use. Computer tech and equipment: telecommunications, data storage, mobile technologies and computer equipment. Software/Internet B2B: applications and web services whose clients are mostly businesses. The sector includes enterprise management, marketing, product development solutions etc. Software/Internet B2C: applications and web services whose clients are mostly individual consumers, including e-commerce, content providers, search and recommendation engines, consumer finance solutions, educational services, games, social networks etc. 19
  20. 20. IN PARTNERSHIP WITH Contacts We are very interested in the opinion of our readers, so if you are an investor, a venture entrepreneur or otherwise interested in Russia’s venture capital market, we will be most glad to receive your feedback and suggestions to help us improve our reports. Please send your feedback and suggestions to vc@rmg.ru Report authors: 20 Arseniy Dabbakh Director Corporate Finance Rye, Man & Gor Securities arseniy.dabbakh@rmg.ru +7 495 258 62 62 Boris Orlovetsky Analyst Corporate Finance Rye, Man & Gor Securities boris.orlovetsky@rmg.ru +7 495 258 62 62
  21. 21. 21 Any information and opinions contained in this analytical document (hereinafter – the “Analytical Materials”) are published solely for informational purposes and are not and should not be construed as an offer or a solicitation of an offer to buy or sell any securities or other financial instruments mentioned herein. Any investments in securities or other financial instruments may be related to significant risks, appear inefficient or unacceptable for this or that category of investors. Any decision on investments in the securities and other instruments requires significant experience and knowledge in financial matters, and in issues of evaluation of risks and benefits related to investments in this or that financial instrument. The Analytical Materials may be used by investors in the Russian Federation subject to the laws of the Russian Federation. The Analytical Materials are not addressed to residents of the USA, UK, Canada, Australia, Japan and to investors in other jurisdictions, unless this is permitted to particular investors in special circumstances provided for by the laws of their home jurisdiction. Rye, Man and Gor Securities accepts no liability for use of the Analytical Materials by investors, who are not permitted to do so under the laws of their home jurisdiction. Information has been obtained from reliable sources and any opinions herein are based on sources believed to be reliable, but no representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of such information. Any opinions expressed are the opinion of specialists of Rye, Man and Gor Securities and subject to change without notice. Rye, Man and Gor Securities is under no obligation to update or correct any inaccuracies contained in the Analytical Materials. Neither Rye, Man and Gor Securities nor any of its directors, employees, agents, affiliates or licensees accept any liability for any loss or damage arising from use of the Analytical Materials. Investors should assume that Rye, Man and Gor Securities does or seeks to do investment business with any of the companies mentioned herein. Rye, Man and Gor Securities and its directors, employees, agents, affiliates or licensees may, from time to time, have long or short positions in, and buy, sell, make a market or otherwise act as principal or as agents in transactions on securities or other financial instruments related to companies mentioned in the Analytical Materials. The Analytical Materials may not be reproduced, redistributed or any other way used, in whole or in part, without the written permission of Rye, Man and Gor Securities. Cover image by Rodney Campbell under Creative Commons license. Copyright © Rye, Man & Gor Securities, 2013 Tel: 7 (495) 258 6262; e-mail: vc@rmg.ru

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