The dramatic growth of the Russian venture industry – which was virtually inexistent just 5 years ago – was illustrated earlier this month by Prostor Capital’s announcement of plans to create a second, $60 million fund.
With $20 million under management, the existing Prostor Capital fund may look modest if compared with such giants as Dmitry Falkovich’s Phenomen Ventures ($300 million) or Runa Capital ($135 million), not to mention DST ($1 billion).
Nonetheless, Prostor has invested in a diversity of startups since its inception in 2011, generally in syndication with Russian or foreign investors.
Among the nine startups of Prostor’s portfolio are medical portal VitaPortal, educational social network Dnevnik.ru, online ad management startup CPAexchange, and online video service provider Dulton Media, as well as US cloud telephone service provider Infratel.
As opposed to what it calls a “roulette approach,” Prostor claims it provides its portfolio companies with “maximum care and assistance.” “Smart money is key since Russia lacks infrastructure for startups and strong entrepreneurs. Syndicated deals, which help minimize risks for investors while providing more expertise to companies, are one of the main elements of our approach,” the fund’s managing director Alexey Soloviev told East-West Digital News.
Prostor intends to invest in five to seven more startups this year – including foreign startups in specific cases. “For example, we may invest in startups with Russian founders or consider supporting those which could transfer technologies to Russia through a local development center,” Soloviev explained.
The second fund, Prostor Capital II, is scheduled for launch next year with the objective to raise $60 million from both Russian and foreign LPs.
