Expanding to Russia (tech sector)
Upcoming SlideShare
Loading in...5
×
 

Like this? Share it with your network

Share

Expanding to Russia (tech sector)

on

  • 1,543 views

 

Statistics

Views

Total Views
1,543
Views on SlideShare
1,536
Embed Views
7

Actions

Likes
2
Downloads
24
Comments
0

2 Embeds 7

https://si0.twimg.com 6
https://twimg0-a.akamaihd.net 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Expanding to Russia (tech sector) Presentation Transcript

  • 1. ••• •••………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... ••• Expanding to Russia with love••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  • 2. •••Just one small step for space agencies…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... In 2010, NASA and ROSCOSMOS agreed on a 1 billion dollar deal to send US astronauts to the International Space Station using Soyouz on Baikonur launchpad. Even NASA has a strong confidence in Russian technology and business relations. … a giant leap for Russian technological credibility••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 2
  • 3. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••So, how does the new Russiantechnology sector look like ?…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  • 4. •••Table of content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. The Russian Innovation Model 2. A promising economy 3. Developing tomorrow’s potential 4. The Russian Tech Recipes 5. Summary••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 4
  • 5. •••Table of content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. The Russian Innovation Model 2. A promising economy 3. Developing tomorrow’s potential 4. The Russian Tech Recipes 5. Summary••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 5
  • 6. ••• High Voltage Research Installation, Moscow………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........•••The Russian innovation model••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  • 7. •••Russia has a strong technological and engineeringculture…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... « To catch up, and to surpass! » Soviet slogan for Science and Technology, introduced by Lenin. The fate of Soviet civilisation has long been linked to its success in its Science and Technology field. Unlike in the US, where they are called geeks, engineers and scientists are often considered national heroes. The Russian innovation model is leveraging on world-class scientists, famous mathematicians, taught in Moscow or St. Petersburg Universities and science-dedicated schools.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 7
  • 8. •••…in which social networks have and still play a majorrole………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Russia has a tradition of networks for simple day-to-day survival, due to the country’s totalitarist past. Since, Russians have developed extensive social networks with high levels of political capacity, which are important means for the diffusion of democratic ideas in Russia. Russians view the internet as « the most valuable source of information, including word-of-mouth through social media where their friends or others with similar interests can share information with each other.» Sources:Business Week, DreamGrow/ LLP, ComScore, Synovate, American Journal of Political Science••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 8
  • 9. ••• Russian constraints drive usages and innovation ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………......... 80 .. 1 millions, of Russian- Worldwide rank in size 2 Worldwide rank in speaking internet of illegal media time spent on social users sharing ($300 million 10 networks in music piracy) Average number of hours spent monthly on internet social Physical networks; world isolation average is 5 Rough climate Poor urban Mistrust in State- planning controlled mediaSources: EWDN, ComScore ••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 9
  • 10. •••This innovation model gave birth to Yandex, a truesuccess story………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Founded by two Russian mathematicians. Ilya Segalovich They wrote a search algorithm for Arkady Volozh Russian-written files in the early 90s. That’s 6 years before Google’s Page and Brin started their research at Stanford University. With that in mind, some would rather say that Google is the US Yandex, than Yandex being the Russian Google… Sources: EWDN.com, Yandex Corporate Website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 10
  • 11. •••Google’s twin brother…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 440 million dollars revenues in 2010 66% growth (b/w Q1 2010 & 2011) 65% share of search-engine traffic in Russia (Google 2nd with 22%) 60% share of Russia’s online advertising revenues 80 web products in total (mostly the same offer as Google’s) Sources: EWDN.com, Yandex Corporate Website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 11
  • 12. •••… that even goes beyond its cadet.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Real-time traffic 4 years before Google #1 Photos Web Portal #1 Traffic previsions #1 Weather … • New products: TV Schedule, E-cards, … • But most of all, a higher precision algorithm than Google’s due to the specificities of the inflective Russian language. Sources: EWDN.com, Yandex Corporate Website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 12
  • 13. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••So, what about the well-knownRussian « copy-paste innovation »model?…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  • 14. •••The copy/paste innovation: a perfectly well-acceptedpath into innovation………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A casual glance at new Russian site BigLion shows you that the creators not only copied Groupon’s business model, but they also just ripped the site design and navigation off completely, too. The sites look nearly identical, even down to the smallest details.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 14
  • 15. •••We can find many examples of copy-paste innovation inRussia…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Web initiatives in Russia are often perceived as pure and simple copies of successful Western companies, which business models, designs and brandings are faithfully replicated. Here are a few examples of the most significant ones : Original company The Russian copy “The Russian Internet could almost be described as tabula rasa with huge potential for opportunity and growth. [So] we just looked at what had been done in other countries, chose the models that proved their relevance and then adapted them to the Russian market.” Marina Treshchova, CEO Fast Lane Ventures••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 15
  • 16. •••… but they eventually leapfrog their original model.………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Vkontakte looks and feels very similar to Facebook, but… … Vkontakte has developed some specific and local functionalities that might even raise strong barriers for Facebook. This example testifies of how Russian services can emancipate from the original model by leveraging on their own strengths to build a unique capability.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 16
  • 17. •••Beyond a simple copycat, Vkontakte beats Facebookbecause of many key features………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Launched in 2006, it has more than 110 million active accounts (vs. 5 million facebook users in Russia). It is the 4th most visited Russian website. • Facebook faces difficulties penetrating the market for two reasons: • Facebooks Russian users are generally of the wealthier, well- traveled, cosmopolitan variety, have foreign friends and tend to live in Moscow and St. Petersburg. • Facebook does not offer content sharing services Sources:Les Echos, ComScore, Vkontakte.ru••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 17
  • 18. •••Vkontakte created a very efficient network, far from itsmodel………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Millions of free pirated copies of domestic and foreign movies dubbed into Russian make it the biggest illegal downloading website in the world and the biggest pornographic video library. • The search engine allows users to look for the nearest ‘active’ single woman in the region, and escorts. • The website also plays its part throughout Russian protests through events like “Revolution Square Saturday” that took place after the December elections Sources:Les Echos, Social Times, BBC••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 18
  • 19. •••Table of content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. The Russian Innovation Model 2. A promising economy 3. Developing tomorrow’s potential 4. The Russian Tech Recipes 5. Summary••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 19
  • 20. ••• International Business Center, Moscow………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........••• A promising economy••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  • 21. •••Europe’s largest internet market by number of users...………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 50 42 Million Russian Million French internet users internet users Strong growth potential. e-commerce size: $8 billion e-commerce size: $45 billion Online advertising: $1,5 billion Online advertising: $3 billion Sources:EWDN, Obeservatoire de l’e-pub, fevad, ACSEL••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 21
  • 22. •••… and the market has yet to expand!………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... France 75% 46% Europe 70% 50% Population Russia 58% 25% 15% Users 2% Total 46% 0% 2000 2005 2010 Total 2011 Evolution of the Internet internet penetration penetration in Russia • Almost three quarters of all Russian Internet users live in the European part of Russia: a huge market is still to be conquered! • Considering a target market penetration of 70%, it would represent a total of 100 million internet users. Sources: internetworldstats, ITU, census bureau••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 22
  • 23. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••Some Russian companies have alreadyseized this appealing opportunity……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  • 24. •••From a mail-service website to one of Europe’s largestInternet groups………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Mixed growth model: from innovation, one fusion and acquisitions. Multiple sources of investment, both local and foreign. Official objectives: COMMUNITAINMENT INNOVATIVE SERVICES Communications Improve the + Internet market Entertainment Sources: Mail.ru Group Corporate Website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 24
  • 25. •••Mail.ru Group: the Runet colossus………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Email, IM, social Games Navigational Media projects E-commerce networks Services Mail 40 MMO Search News Travel Agent (IM) 47 games for social Answers Weather Goods MyWorld (MIR) platforms Maps Entertainment Property OK Mobile Hi-Tech, Auto, Lady, Money ICQ Rating (Analytics) Kids, Health Work Blogs Cards Headhunter Dating Mailing Free-lance Futubra $325 million revenue in 2010 from diverse sources: Market leader in display 11% advertising, internet Advertising 39% Games communications, and in 20% Paid services social. Other 30% Sources: EWDN, Mail.ru Group Corporate Website, Mail.ru Annual Report 2010••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 25
  • 26. •••Mail.ru Group has given birth to a financialgiant: DST………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • A major late-stage investment fund • Invest minimum around $100M, for companies valuated at least $1b • Goal: to give liquidity to tech companies in order to delay their IPO, so that they can focus on product development instead of liquidity. • Large network outside Russia via direct partnerships or co-fundings: Facebook, Zynga,… Accel, Greylock, Kleiner Perkins… Sources: TechCrunch’s 2010 Yuri Milner interview••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 26
  • 27. •••DST’s Investments (undisclosed shares)………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........An impressive portfolio including many of the hottest tech firms of themoment… … probably starting the first bridges between Russian and Western companies. Sources: TechCrunch, WSJ, EWDN••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 27
  • 28. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••These connections with the WesternWorld raise the question of theRussian firms internationalization.…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  • 29. •••Is Russia’s tech companies weak international presencea real issue?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Why do firms internationalize? Growth & Performance Ideas & Innovation New clients Exclusive information Tax Benefit Cultural mix Economies of scale Technological advantage … … But there is plenty of both in Russia! Their weak international presence is not necessarily a concern, as many examples show that Russian tech companies successfully internationalize when needed…••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 29
  • 30. •••VimpelCom’s strong international presence………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A strong international presence, on several continents Europe• 181 million mobile Russia, Ukraine, Armenia, Georgia, Italy subscribers around the world Asia Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, Vietnam,• $10.512billion dollars Cambodia, Laos, Bangladesh, Pakistan revenue in 2010 Africa Algeria, Burundi, Zimbabwe, Namibia, Central African• Based in Amsterdam Republic• 10 Brands North America Canada Beeline, Kyivstar, djuice, Wind, Infostrada, Mobilink, Leo, Banglalink, Telecel, Djezzy VimpelCom is showing that there’s no such thing as a Russian tech failure to cross Russia’s borders… Sources: VimpelCom’s 2010 Annual Report, Datamonitor••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 30
  • 31. •••Kaspersky, a long-date international actor………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • One of the world’s leading antivirus research and software companies • Founded in 1997 in Moscow • Fast expansion to : India, Germany, France, the Netherlands, the UK, Poland, Romania, Sweden, Japan, China, South Korea, and the USA. They recently enrolled Jackie Chan as their product spokesman in a move to conquer China. Sources: Wikipedia, Official Website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 31
  • 32. •••Which countries are mostly targeted by Russian firms?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........4 types of links to Russian companies: Historical Technological Strong potential Proximity• Both cultural and • Example for innovation • Market in development • Land connection geographical proximity management • Geographical proximity • Within quick flight reach• No language barrier • Experimentation • Existing networks from• Existing networks • Innovation harnessing other industries Ex-soviet countries USA South East Asia EuropeExamples:••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 32
  • 33. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••Alongside internationalization,investment power is developing fastin Russia .…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...
  • 34. •••DST is developing, extending its network to Asia………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... DST Global II Raised in May 2011 A capital of about $1billion to invest Expected to be invested in Asia, following the path of previous investments (Alibaba, 360buy) Russian tech investments are not only focusing on high profile Western companies, they are also getting key shares in soon-to-be Eastern giants. Sources: EWDN.com••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 34
  • 35. •••Public initiatives foster the development of investmentsin Russia………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • 120 billion rubles ($3,72b) from the • State funded venture capital company Russian Federation created in 2007 • To give Russia a leading position on the • $1.25 billion capital to fund VCs nanotechnology sector while accelerating investments using a 5% loan without the commercialization of nanotech asking for stocks in the companies. products (inside and outside Russia) • Two goals: Investing in Russian tech • 2010: 44 projects approved, 47.1 billion while attracting and developing VC rubles invested, total budget of the networks in Russia. projects 146 billion rubles Sources: Rusnano’s 2010 Annual Report, CNET News••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 35
  • 36. •••Top VC firms invest in Russia………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........US VC firms’ investment is clearly expanding to Russia… Top 15 VC firms from Forbes 2011 Midas List Accel Partners Kleiner Perkins Caufield & Byers But also… Andreessen Horowitz New Enterprise Associates Mangrove Capital Partners Benchmark Capital Redpoint Ventures General Catalyst Partners Bessemer Venture Partners Sequoia Capital and more… First Round Capital SV Angel FLOODGATE Union Square Ventures Founders Fund Venrock Greylock Partners Already publicly investing in Russian startups … a move that we can expect even more thanks to the growing relations with DST. Sources: EWDN, Corporate websites••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 36
  • 37. •••Table of content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. The Russian Innovation Model 2. A promising economy 3. Developing tomorrow’s potential 4. The Russian Tech Recipes 5. Summary••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 37
  • 38. ••• Skolkovo Innovation Center, Moscow………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........•••Developing tomorrow’s potential••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  • 39. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. An overview of the Russian innovative markets 2. A strong network of incubators supporting new initiatives 3. The Russian boiling innovative ecosystem: Startups 4. Some barriers to keep in mind••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 39
  • 40. •••Up-to-date Russia: mobile phones are extremelypopular…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A strong mobile phone penetration 186 million Total mobile phones 140 million Total population There are 1.5 SIM cards per Russian inhabitant Sources: newmediatrendwatch, emarketer, AC&M••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  • 41. •••…and are spreading internet technologies!………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... While households’ internet access grew by 10% in 2011, the household broadband penetration remained flat: mobile phones internet users account for most of the new internet users Still, only 7% of subscribers have access to the 3G network Smartphones penetration is still low (11%) but is quickly growing: +118% between 2010 and 2011 Sources:informa telecoms&media, newmediatrendwatch••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 41
  • 42. •••Mobile phones are creating an opportunity: youngerusers are driving mobile internet growth…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Users by age (Aug 2011) 100% 90% 80% internet users mobile internet users 70% 60% 50% 40% 30% 20% 10% 0% age 12-17 age 18-24 age 25-34 age 35-44 age 45-54 age 55+ Sources:informa telecoms&media, newmediatrendwatch August 2011••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 42
  • 43. •••… creating a fast-expanding market for mobile content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... At the end of 2010, touch screen phones accounted for about 30% of all phones sold in Russia The Russian mobile content market could reach as much as $1.8 billion this year In 2013, the overall mobile content market could exceed $3 billion. Sources: ewdn, informa telecoms & media, newmediatrendwatch••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 43
  • 44. •••Even with homemade solutions, the social networkmarket is up to date………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... LiveJournal.com Vkontakte Odnoklassniki.ru Blogging, social media Russia’s 1st social network Russia’s 2nd social network Intellectuals express Similarities: facebook Face detection, dating themselves freely 116 million accounts Similarities: Classmates 30 million monthly in Russia 45 million Moi Krug – ‘My Circle’ MoiMir – ‘My World’ Job seeking, pro networking Blogging Similarities: LinkedIn Similarities: Myspace 1 million users (vs 0.5 on Russian 20 million visits per month LinkedIn).••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 44
  • 45. •••The e-commerce market is developing………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The Russian e-commerce market is still emerging but is expected to grow fast in volume and result. $30 bn $18 bn $8 bn $10 bn 2010 2011 2015 2020 Forecast••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 45
  • 46. •••What will be driving Russian e-business in the next fiveyears?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • The potential market growth in Moscow and St. Petersburg in terms of new users is reaching its natural limit. • Most new users will come from other Russian regions, typically recent Internet users from larger cities making initial online purchases. 2010 2015 Moscow+ Started using internet before 5.6 5.1 2011 St. Petersburg Started in 2011 or after Total 5.6 2.5 7.5 78 Regions Started using internet before 2011 8.4 7.6 million Started in 2011 or after 13.2 Total 8.4 20.8 Internet users Total Russia 13.9 28.3 in 2015••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 46
  • 47. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. An overview of the Russian innovative markets 2. A strong network of incubators supporting new initiatives 3. The Russian boiling innovative ecosystem: Startups 4. Some barriers to keep in mind••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 47
  • 48. •••A network of incubators demonstrating the recentdynamism of the startup ecosystem………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A sample of the most active and significant Incubators launched in Russia, that show the willingness and dynamism of an emerging ecosystem dedicated to innovation and entrepreneurship. …••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 48
  • 49. •••HSE Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW • Founded in 2006 by students and professors of HSE. • A pool of 6 startups • Startups get an equipped office space as well as administrative and consulting support. • HSE(10K) similar to MIT(100K) startup competition • Former incubated startups: SmartKniga, Skillopedia.ru, Native Speakers Club, Roomix, PensiaMarket, TimePad. (19 startups so far) Sources: Official website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 49
  • 50. •••Academy of National Economy Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW • Founded in 2010 by the Academy • Classic incubator : office, advisors, classes, events. • Provides an “Accelerator” program with early stage funding • Lot of partners ranging from Microsoft BizSpark to Yandex, includes investment partners and a huge number of information partners Sources: Official website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 50
  • 51. •••Moscow State UniversityStudent Business Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW • Founded in 2010 with a startup competition aiming at recruiting the first batch of teams (Webils, Maxigen, Introvision, Idata, Web-constructor) • More than traditional support to its startups, MSU SIB provides exchange programs with US Ivy League’s universities such as MIT and Harvard. • Partners have invested more than 50 million rubles in the startups • The advisory board includes representatives from top-level companies and funds : Microsoft, Alliance Rosno, Rusnano, Russian Venture Company,… Sources: Official website, Direct contact••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 51
  • 52. •••Fast Lane Ventures………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW • Leading developer of internet companies, Fast Lane Ventures was founded in 2010. They target B2C markets. • Has launched 15 internet start-ups, • Unique model: the ’Fast 50’ enables it to launch a new internet business within 50 days. • Has attracted $50M from different investors • The team brings together 700 internet developers, and holds classes and training sessions along with help in finding funds. Sources: Official website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 52
  • 53. •••Farminers Startup Academy………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW •Founded by former Vice President of Mail.ru, Igor Matzanyuk, in August 2011. The Fund invests in Russian projects. •Selected projects receive up to $150,000 USD to prepare a project prototype, an office space, and computers. •After three months, the prototype will help the Farm find investors for the project. •Farminers will generate funds for a period of three to six months in exchange for a 40 percent stake in the project. •Targets online projects, compatible with mobile devices, and mass-market. Sources: Official website, lenta.ru••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 53
  • 54. •••Ingria Technopark Business Incubator………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... ST PETERSBURG Ingria future technopark • Founded in 2008 by the Inngria Technopark. • Among Top 5 most efficient business incubators in Russia (Forbes) • Two programs: • Pre-incubation, 6 months (cost 500 RUR/month) • Incubation, 11-33 months (cost 1500 RUR/month) • Network of partners • 70 residents: IT, Ecology, Biotech, Medicine, Energy, Material Science. Sources: Official website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 54
  • 55. •••Tex Drive………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... MOSCOW • Founded in 2011, TexDrive is a member of the Techstars network, and is supported by Springboard, two worldwide well-known start-up accelerators. • TexDrive offers 12-week programs that help start-ups define a business model, find investors and solve legal issues. Selected projects get $25K at the start, then $100K at the end of the program, while TexDrive gets a small share of the company in return. • Own funds and TexDrive investors network represent potentially $3B in venture capital funds. Investors are local wealthy individuals, entrepreneurs and investment managers. • First program launched in January 2012 Sources: Official website, Marchmont Capital, EWDN.com••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 55
  • 56. •••Skolkovo: can Russia build its own Silicon Valley ?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • The Skolkovo Innovation Centre, still under construction and completed by 2014, is the most remarkable and emblematic example of the Russian initiatives to foster innovation and put Russion on the “technology map”. • The strategic goal of the Skolkovo Innovation Centre is to concentrate international intellectual capital, thereby stimulating the development of break-through projects and technologies. To help Russian innovators liaise with international VCs, Skolkovo has also opened offices in UK and in the Silicon Valley. • Mainly fund by the Russian government, Skolkovo gathers innovation clusters, a technopark, a university and a city- laboratory, near Moscow. The innovation centre cooperates with a number of foreign tech giants, including Cisco, Ericsson, Nokia. Microsoft and SAP are launching R&D centres in Skolkovo. • The innovation clusters cover the following fields : • Information technologies • Energy Efficient technologies • Nuclear technologies • Biomedical technologies • Space technologies and communication • At the moment, the Skolkovo Foundation already supports an estimated 350 Russian innovation companies, with 220 of those coming from 30 different regions in Russia. Plans are to increase the number of residents to 500 companies this year.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 56
  • 57. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. An overview of the Russian innovative markets 2. A strong network of incubators supporting new initiatives 3. The Russian boiling innovative ecosystem: Startups 4. Some barriers to keep in mind••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 57
  • 58. •••Already some extremely innovative companies arecoming out of this ecosystem………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A selection of some highly innovative start-ups “made in Russia” that offer a disruptive value proposition, and testify of the dynamism of Russian entrepreneurs.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 58
  • 59. •••Yota………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Yota (4G internet) is the first Russian high-speed wireless network based on Mobile WiMAX. • Those actors have entered the telecom market by providing access only, differentiating with disruptive distribution models. • Yota operates in Russia, Belarus and Nicaragua. Yota offers fixed, nomadic, and fully mobile wireless broadband Internet access, through dedicated mobile devices. Yota also offes to stream movies, TV programs, and online music in its mobile services catalogue. It focuses on high density urban areas.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 59
  • 60. •••Displair………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • DisplAir offers an interactive non-screen display which ‘floats’ in mid-air. • The ‘air screen’ consists of vapor particles which do not leave any traces of moisture • It can be seen, heard, smelled and touched • Images on the display can be static or animated, in 2D or 3D • The device shows potential for use in advertising, entertainment, education, and medicine. For instance, the multitouch management of the image creates opportunities for brands to promote new products with visual, tactile and olfactive experience. • Displair has been producing and selling its first prototypes since 2010. The device may cost as little as a few thousand US dollars when manufactured in large quantities. • Displair won numerous Innovation Prizes, of which Innovate Russia that gave them the resident status at Skolkovo and the Technovations Cup, another national innovation cup.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 60
  • 61. •••ResumUP………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • ResumUP is a service for personal data visualization aimed to set a new standard in career management, online and social recruiting. • Basically, it gathers your data from multiple sources (LinkedIn and Facebook Connect so far) and transform it into a clear visualization. • Then with a special algorithm, it can rank your profile and match it to job offers. • ResumUP is expected to launch as a recruiting service but could expand its services as a plugin to other websites.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 61
  • 62. •••Good Roads………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Goodroads is a mobile mapping service that collects data about road surface quality. The system is paired with an iPhone application which gathers data and runs an algorithm that evaluates road conditions. The project was launched in 2011 and won the Opera Software Startups Award. The site was created by a team of students at the St Petersburg State Polytechnical University, helped by the QD incubator.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 62
  • 63. •••Developing tomorrow’s potential………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. An overview of the Russian innovative markets 2. A strong network of incubators supporting new initiatives 3. The Russian boiling innovative ecosystem: Startups 4. Some barriers to keep in mind••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 63
  • 64. •••The Russian Business “Folklore” : myth or reality ?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Elvira Nabiullina, Russias minister of economic development, left, and Pascal Lamy of the W.T.O at a ceremony in Geneva, on December 6th 2011. WTO membership is expected to shine light on the regulations and corruption that dog the Russian economy.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 64
  • 65. •••Business in Russia still faces many challenges………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Foreign investors and business developers are often discouraged by the historical barriers that are still deeply attached to the common image of the Russian economy : • Rules of law that fail to match countries such as the U.S. and Western Europe; • Bureaucracies are confusing and cumbersome; • Corruption is rampant and is even seeping into the education system; • Powerful oligarchs dominate key industries; • Few Russian people actually speak English; • And secrecy in R&D is the norm… Even if those threats are still a reality, it’s yet possible to do business in Russia. Thanks to public and private initiatives that have risen so as to align with Western standards and enable Russia to attract foreign investors and develop international partnerships, those barriers have been substantially lessened.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 65
  • 66. •••Legal Framework………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The Russian legal framework is undergoing severe and major improvements. But Russia also exhibits a significant implementation gap, meaning that many laws on the books are poorly enforced. Sources: The Global Integrity Report 2010••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 66
  • 67. •••Intellectual property………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Since the dissolution of the Soviet Union, the Russian Federation has sought to address important issues surrounding intellectual property and its protection. In a number of areas these efforts have led to greater recognition of intellectual property rights and now provide for a greater degree of protection. • Although the level of IP protection in Russia does not yet match the sophistication of most European jurisdictions, fundamental IP rights are recognized in Russia. A substantial basic regulatory framework exists within which companies may attain protection of their intellectual property assets. The case of pirate softwares Pirated software accounted for 65% of the volume of all software units installed on PCs in Russia for the year — down 2% from 2009 but nevertheless representing a commercial value of approximately $3 billion. A survey conducted by BSA as part of its study of piracy levels in Russia indicates that the majority of Russian respondents understand the benefits of licensed software, including the factors of reliability (86 percent) and access to technical support (69 percent). However, more than half of Russian respondents do not have a clear understanding of what constitutes legal and illegal use of software. Sources: Business Software Alliance (BSA) in its 2010 report on global piracy.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 67
  • 68. •••Russia’s Underground e-market………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Russian social networks host the biggest illegal media library in the world. Experts estimate that Majors are losing up to 10 million dollars per day on that market. The website was sentenced to fines at the beginning of 2012 for copyright infringement. Informal • Vkontakte groups enable illegal Commercial Vkontakte groups trades and e-commerce. 150 informal groups have more than Dec 2010 Nov 2011 100,000 members on the website. Mobile devices 170000 256000 • Oborot.ru, Russia’s leading online resource and event organizer for e- Fashion 105000 170000 commerce, announced in October Watches 102000 150000 2011 the creation of the Electronic Commerce Association, which aims “to facilitate the development of Childrens goods 80000 16000 online retail businesses and define Cosmetics 70000 105000 the principles of civilized business.” Services 55000 83000 Jewelry 35000 74000 Sources:Les echos, ewdn, thecmuwebsite••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 68
  • 69. •••Payments are still an issue………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • The Russian economy still suffers from a lack of standardization in payments means, leading to what might appear as a payment jungle. • Russian consumers face a lack of trust when it comes to online payments. • To this day, Russians still prefer to deal in cash for the majority of their purchases. • Cash-on-delivery is the most popular method of payment for online transactions in Russia : the online user agrees to come pick the item up and pay for it with cash. • Russian social networks introduced new payment instruments, including virtual currencies and credit cards. More than 50 internet payment solutions are now available. • President Medvedev signed a law in June 2011 that addresses legal regulation of e-money. New obligations, such as obtaining licenses and increasing authorized capital, have forced many sites to shut down their online payment systems. • Odnoklanisski’s solution couldn’t be integrated in the social commerce sphere and new legislations have stopped official e-payments on Vkontakte. Vkontakte interrupted Ozon’s integration in its payment system. Sources:The Moscow Times, ewdn••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 69
  • 70. •••Corruption still dogs the Russian economy………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 147th 25th 24th 75th 73rd••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 70
  • 71. •••Table of content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. The Russian Innovation Model 2. A promising economy 3. Developing tomorrow’s potential 4. The Russian Tech Recipes 5. Summary••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 71
  • 72. ••• Goose with apples, a Russian specialty………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...........•••The Russian Tech Recipes••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  • 73. •••What is specific about Russia?………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Russia has a strong scientific culture. Russia is the largest country in the world: with very diverse density of population… and has still to complete the equipment of its low density areas. Russia is facing a social and technology gap inherited from more than half a century of communism. Russia is well-known for its extremely tough weather.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 73
  • 74. •••Lots of constraints means a lot of creativity………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... A sense of emergency in Brilliant mathematicians bridging the technology gap Grigori Perelman, the mathematician Constraints and speed lead to technological who solved the Poincaré Conjecture. breakthrough such as Displair New ways to reachIntense indoor usages Health issues underdeveloped areas Russians digging a passage to their Alcoholism is still a major issue in A railroad near Baikal Lake. home after a snow storm in Odessa. Russia, reducing male life expectancy.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 74
  • 75. •••Brilliant mathematicians create an expertise in algorithms………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The crafting of high precision algorithm is one of the most mathematical part of IT Services. In Russia, the training of top-notch mathematicians in specialized schools has permitted the emergence of a field of expertise in algorithmic. For example: Yandex’s search algorithm is said to be better than Google’s. Why ? Due to the specificities of the Russian language (strong inflectivity of the language), they had to devise a way to understand the meaning of a sentence by splitting the assembled words and then read each one of them. Results ? Even though this technology is not required in Western languages, it has proved to be more efficient on research. Something Google lacks in its Russian search.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 75
  • 76. •••Brilliant mathematicians know how to crack the code…and protect it!………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... The expertise developed by Russian mathematicians in algorithmic is not only used in data analysis, it has been used for a long time in cryptology and hacking. Russian hackers are world-known for their creativity and expertise. And when it comes to data security, who is the most relevant expert if not the person who knows how to hack into your system? Even some cryptographic technics are named after Russia: Russian copulation, for example, is a method of rearranging plaintext before encryption. It is now a business in Russia: groups of hackers are paid to test the security of IT infrastructures. Examples of Russian cryptography and hacking expertise: Sources: Friedrich Ludwig Bauer, Decrypted Secrets••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 76
  • 77. •••Crypto AG is a Swiss-based company, but Russian-based technology………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Crypto Telecommunication Security is «the preferred top-security partner for civilian and military authorities worldwide ». • Its business office are located in Switzerland, but its technical teams are based in Russia, tapping into one the best security experts pools in the world. • They conceive and commercialize top-security communication solutions. • They are about to launch a new product: Nume. It will allow mass market to benefit from encryption-based technology to secure their personal lines. • Nume is certified on multiple Defense standards across the globe (China, South America, Indonesia, India, Middle-East,…). Sources: corporate website••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 77
  • 78. •••A company specialized in hackproofing: StopTheHacker………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • StopTheHacker’s proprietary technology helps solve web-scale security problems involving malware on websites, hacker attacks and other types of online abuse. • It uses machine learning (ML) and artificial intelligence (AI) techniques, which are monetized on a SaaS model. • StopTheHacker has just received a $1.1 million initial funding from a group of Russian investors but also Brian NeSmith (CEO of Blue Coat Systems). Sources: EWDN••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 78
  • 79. •••Telecom sector proves Russian ability to adapt toimportant constraints………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Even with the high demand of Russian population for telecommunication infrastructure, telecom companies were facing two main issues in their expansion: • Low solvability of the majority of the population • High cost of implementation due to • Ancient buildings • Foreign and isolated Russian backcountry • Russia now seems to have tackled these issues and numbers of landlines, internet users and mobile users are skyrocketing. Examples:••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 79
  • 80. •••Inango devised a new way to cut implementation costs………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Inango offers complete solutions for service providers looking to connect entire communities to the Internet. • Inango solutions are targeted at populations living in higher density areas (high-rise apartment buildings) and where sensitivity to cost is high. • They connect to a high-speed backbone at a local point of presence (typically based on optical fiber) and provide ways of connecting to each individual house- holder. • They use a simple yet efficient technology: they transmit and receive data over existing coaxial cables.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 80
  • 81. •••Vimpelcom’s rise shows the effiency of Russianinfrastructure development strategy………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • In 2001, their strategy was to expand Vimpelcom’s infrastructure in all the regions of Russia. They quickly became one of the largest carrier in Russia in terms of subscriber base. They eventually used this experience to expand to emerging markets. Russia Vietnam, Cambodia, Ukraine, Kazakhstan, Laos, Algeria, Uzbekistan, Tajikistan, Bangladesh, Pakistan, Armenia, Georgia, Burundi, Zimbabwe, Kyrgyzstan Namibia, Central African Republic Example of a successful expansion in Cambodia: May 2009: Launch of commercial operations (9th entrant) December 2010: 80% of total population covered 650k mobile subscribers (3rd largest operator) Sources: 2010 Annual Report••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 81
  • 82. •••The Health sector is proving Russia’s ability to catch up………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • The Russian Health sector has been facing many issues: • A low male life expectancy • Under utilization of the primary health care system by adult males • A low quality of pre-natal and natal care • High abortion rates, most of which performed outside health care facilities • The Russian government has now seized the issue with multiple plans to modernize the sector. • Part of which is a 1 billion-dollar bill to digitalize the public health-service. • And a partnership with the U.S. on health issues • Many private initiatives have emerged from these opportunities. Examples: InErPharm••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 82
  • 83. •••Maxygen Mobile DNA Tests………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Maxygen develops a technology of mobile DNA testing that can detect any infectious disease only in 10 minutes only for $10 with the use of a simple small device and a single-used cartridge. • Part of MSU SBI, the three founders are alumni of Moscow State University. Valery Ilinsky, CEO, has a degree in Virology from MSU, and has multiple experience abroad, including the Institute of molecular Cancer Research (Zurich), Department of tropical and infectious diseases (Washington). • The startup has ranked very well many competitions, including a second position in Intel’s Global Challenge.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 83
  • 84. •••InErPharm reduces the toxic effect of cancer treatment………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • InErPharm is a Russian startup from MSU SIB, that will commercialize a treatment reducing the toxic effect of chemotherapeutic drugs. • Basically, the treatment consists in loading drugs into the red cells of the patient. • The solution not only soften the side effects of cancer treatment, but it contributes to a longer life expectancy for cancer patients.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 84
  • 85. •••One of the fastest countries in technology adoption………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... This fast technology adoption is driven by two main factors: At home At work Russians have a very Russian top managers intense use of Internet, believe in developing explained mainly by their technologies that do not lack of trust in regular strictly follow their information channels. company official guidelines. Sources: Internet World Stats, TNS , PC.org, EWDN••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 85
  • 86. •••Social media is the spearhead of technology adoption………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... VS. 10M users connect daily 23.4M users connect daily (25% of French online population) (30% of combined RU, UA, KZ, MD, BY online population) 4h30 monthly use average 10h monthly use average Russian Twitter users… … have tripled in one year … are more active than the international average, with 27% posting at least one tweet in four months Sources: Internet World Stats, TNS , PC.org, EWDN••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 86
  • 87. •••Russian Internet is reaching milestones before WesternInternet………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... advertising Russia has already reached the point where Internet ad spending has overtaken print (41.8 billion rubles vs. 40.4). In comparison: - UK reached this point in 2010 - USA is expected to reach it in 2012 Sources: Internet World Stats, TNS , PC.org, EWDN••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 87
  • 88. •••Technology gap forces Russia to explore alternative andinnovative solutions………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • While Western Europe was catching up on the on credit cards penetration in the late 80s, credit cards remained unknown in USSR until the mid 90s. • The aversion for non-physical money inherited from decades of comunism didn’t help the penetration of credit cards in Russia. • With the rise of Internet payments and e-commerce, they had to find new ways to pay… From cash payment terminals to mobile-payment Sources: Finextra, Moscow Times••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 88
  • 89. •••Cash payment terminals, a solution invented in a societywithout credit cards………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Facing a surge in the number of internet users, internet companies tried to invent a way to pay online without a credit card. • They invented these cash payment terminals where you can credit your virtual account directly with cash. • This process explains a lot why the Russian e-commerce market is still positionned so far behind the Western one.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 89
  • 90. •••Mobile payments are pushed by the industry leaders as away to catch up on non-physical money………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Russia’s three leading mobile operators (Megafon, MTS, Vimpelcom) have announced in January they will provide their subscribers with full common access to their respective mobile payment systems. • ‘Easy Payment’ and ‘Ruru’, the most important payment systems, are already open beyond the respective subscriber bases of MTS and Vimpelcom. They are accessible to any bank card holder and can be replenished from the corresponding bank account. • In comparison with Western countries, Russia is way ahead in m-payments adoption: Use of mobile payment 31% VS 6% (12% contactless) Russia UK • MasterCard Worldwide ranked Russia top tech-savvy for new payment technologies.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 90
  • 91. •••Table of content………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... 1. The Russian Innovation Model 2. A promising economy 3. Developing tomorrow’s potential 4. The Russian Tech Recipes 5. Summary••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 91
  • 92. ••• •••………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... ••• Summary••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com
  • 93. •••Opportunities to seize………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • With a skyrocketing number of Internet and mobile users, and an embryonic commercial market built on it, Russia offers gigantic opportunities ready to be seized. • So far, Russians fail to find partners in the Silicon Valley despite their attempts to build sustainable relationships, whereas Europeans are still culturally and geographically closer to Russians.••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 93
  • 94. •••Russia offers clearly identified specialties………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... • Algorithm expertise solving Big Data issues • IT Security and Defense (Cryptography, Hacking, Hackproofing) • Agile infrastructure deployment in emerging countries • Innovative technologies in Health and e-Health solutions • Fast technology adoption • Large adoption of mobile payment Whether you are an industry leader or a startup, here are 3 ways you can benefit from Russia: Russia as a Russia as a Russia as an Pool of Experts Test Laboratory Observatory••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 94
  • 95. •••Russia is a Pool of Experts………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Russia is a Pool of Experts Hire Russian specialists and develop partnerships with experts in order to: • Specialize in algorithmic • Tackle Big Data issues • Use new solutions from Russian Health and e-Health••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 95
  • 96. •••Russia is a Test Laboratory………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Russia is a Test Laboratory Benefit from Russian specificities and from the early-stage development of a booming market: • Detect the glitches in your infrastructure security solutions with specialized hackers • Test efficiently new services thanks to Russians quickness of adoption • Anticipate the evolution of mobile and mobile-payment usages in Western Europe••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 96
  • 97. •••Russia is an Observatory………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Russia as an Observatory Russia is an innovative place, with a growing number of initiatives to watch: • Alternative solutions to well-known issues • Intensive use of social networks • A strong growth market • A fast building ecosystem••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 97
  • 98. …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...•••We believe in Russia, in its entrepreneurswho are hungry for success. We also believe inthe Russian market. We look at Russia as akey investment market for us, and we aredefinitely committed to it.…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………... David Waroquier, Mangrove Capital Partners
  • 99. •••………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Our Moscow office helps you evaluate your potential in Russia. Moscow meet_moscow@fabernovel.com••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 99
  • 100. •••………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........... Paris 17 rue du Faubourg du Temple 75010 Paris +33 1 42 72 20 04 meet_paris@fabernovel.com ……….……………………………………………………………………………………………… San Francisco 169 11th street, San Francisco CA 91 103, USA +1415 626 6406 meet_sf@fabernovel.com ……….……………………………………………………………………………………………… New York 412 Broadway, Floor 2, Ny NY 10013 +1415 298 0209 meet_nyc@fabernovel.com ……….……………………………………………………………………………………………… Moscou 3-iy Monetchikovskiy Peureulok 17, Stroenie 2 Moscow 11054 +7 (903) 009 02 75 meet_moscow@fabernovel.com••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com 100
  • 101. ••• ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………......... .. Cyril Vart Caroline Pandraud VP Strategy & Development Project Analyst cyril.vart@fabernovel.com caroline.pandraud@fabernovel.com Kevin Smouts Tom Boeken Junior Project Analyst Junior Project Manager kevin.smouts@fabernovel.com tom.boeken@fabernovel.com…………………………………………………………….………………………………………………… Aknowledgements…………………………………………………………….………………………………………………… Adrien Henni, Alina Lotfullina, Yury Mitin…………………………………………………………….………………………………………………… Contact…………………………………………………………….………………………………………………… 17 rue du Faubourg du Temple 75010 Paris +33 1 42 72 20 04 www.fabernovel.com April 2012 • Expanding to Russia with love • ••• Follow us on twitter @fabernovel ••• Visit our website and discover what we do: fabernovel.com