Earlier this month RVC, the state-owned fund of funds supporting innovation in Russia, announced a new investment strategy. Aiming to stimulate VC activity in the country, which is still stands at relatively low levels, RVC intends to create 10 new funds until 2020, in addition to its existing 26 affiliated funds.
Among these new investment tools will be “funds for young management teams,” with successful experience in the fields of startup entrepreneurship, business angel investment, venture investment or corporate innovation. RVC’s share in such funds will not exceed 25% and (250 million rubles, or some $3.7 million at the current exchange rate).
Another program aims to fill the existing gap in the investment cycle with later-stage investment funds (rounds B, C and pre-IPOs). RVC’s share in such funds will not exceed 20% and 1.5 billion rubles (around $50 million).
The total capital of existing RVC-affiliated funds amounts to 35.7 billion rubles (a bit more than $500 million at the current exchange rate), of which RVC’s share accounts for 22.7 billion rubles.
New laws, less barriers wanted
The fund of funds wants to “proactively cooperate” with market players, inviting representatives of relevant business communities to its investment committee and “bringing internal procedures in line with fund market practice.”
RVC will offer a “service platform” intended for investors, managers and funds, as well as portfolio companies. For example, “RVC investors will be assisted in the search for team managers and structuring of funds. Funds and management companies will be provided with expert support in investment decisions, assistance on international markets, the structuring of pipeline and IPOs.”
Better “synchronization of public policy measures with the needs of the VC community” is also needed, believes RVC, which implies to “change the legislation, lift the barriers that prevent new classes of investors to come to the market, increase industry transparency and prepare global industry analytics.”
To these ends, RVC is drafting a strategy to develop the VC market and increase direct investment in Russia, which it intends to submit to government authorities by the end of this year.
Approximately 200 venture capital funds and management teams currently operate in Russia, according to RVC. Last year market volume reached some 21 billion rubles (roughly $360 million at the average exchange rate), of which foreign investment accounted for 22%, according to the IIDF.
