DSight, a database of deals dedicated to the Russian venture market, has just released the English version of its latest yearly report. This research includes contributions from EY, investor association NAIMA, CrunchBase and East-West Digital News.
The market grew significantly last year, reaching $714.4 million, up 51.6% from 2017. If including Sberbank’s $500 million investment in an e-commerce JV with Yandex – agreed in 2017 but received in 2018 – last year’s deals exceeded $1.2 billion in total.
These numbers include deals involving startups registered outside Russia but with roots in the country.
Putting aside the Sberbank-Yandex JV investment, the three largest deals of 2018 were:
- An investment of $80 million in Gett, a ride-hailing service with Russian roots;
- An investment of the same amount in WayRay, an augmented reality solutions developer with Russian roots;
- Capital injections of at least $61 million into Ozon, a leading Russian online retailer.
Venture investment in Russia in 2018: Amounts per type of companies (in million USD)
While the overall number of deals remained almost unchanged (from 302 in 2017 to 299 in 2018), the average value per deal in late stage investments increased dramatically. It grew from $13.9 million in 2017 to $49.2 million in 2018 (including the three deals mentioned above).
E-commerce deals accounted for more than 30% of all venture investments in Russia, with $194.2 million worth of funding in 2018 (not including Sberbank’s capital injection in the Yandex Market JV).
Venture investment in Russia in 2018: Amounts per segment (in million USD, excluding exits)
PE funds and corporate VCs contributed the majority of investment money in 2018, with PE funds in particular accelerating the growth of late-stage companies. The number of deals involving such funds quadrupled from 2016, reaching 12 deals in 2018. Among these deals were an $8 million injection by Rusnano Sistema SICAR and Skolkovo Ventures into Ivideon, and a $9 million round for DOC+ involving and Vostok New Ventures and Baring Vostok.
Corporations were involved in 40% of all deals. Much of this related to the fact that as many as 20 corporate accelerations programs launched in 2017.
In addition, a new law on private-public partnerships was passed last year to make fund creation easier. For instance, Skolkovo Venture Fund – Industrial I, which was set up in late 2017, has received contributions from Russian Railways and Russian Helicopters totalling $9.2 million.
This DSight report is a continuation of a series published previously by investment advisory RB Partners. Dsight also carries out contract-based research for customers on markets, companies, and investors.
- To download the report at no charge, please click here
