2025 promises to be difficult, but interesting for Russian business and investors. What promising niches are worth paying attention to, Maria Kuznetsova, investor, finance expert, founder of the Frontiers brand, and Daniil Ladin, financial analyst, tell.
Venture capital investment
The startup investment market has somewhat revived in 2024. For 12 months, 113 transactions were announced (against 94 in 2023). Business angels were the main growth driver. They made 45 deals, about 40% of the total. For comparison: in 2023 there were only 25 such transactions.
One of the reasons for the increased interest from private investors is a decrease in the availability of foreign assets. As investment opportunities outside the country decrease, they are increasingly looking for interesting domestic projects. In 2025, this trend is likely to continue.
Today there are startups on the Russian market that use AI, blockchain, cloud computing and other popular modern technologies. The spheres of activity of Russian startups are also very diverse: from a system for identifying talents in children’s football to building secure computing systems using full homomorphic encryption. So investors definitely have a choice.
Another thing is that venture capital investments are extremely risky. Success in them depends half on the expertise of the investor, and half on his luck. Despite the fact that in-depth analysis of the market, niches and projects partially reduces the risks of investments in startups, it is impossible to avoid them completely.
Therefore, it is important for a private investor, on the one hand, to conduct a very serious examination of projects, and on the other, to believe in his own luck. At the same time, it is optimal that venture capital investments account for no more than 10-15% of capital.
Investing in a business
This segment of investment market has been growing rapidly over the past few years.
In 2019, Russia adopted the law “On attracting investments using investment platforms.” It regulates the operation of crowdfunding online services that allow you to invest in business, and protects the rights of users.
As of January 23, 2025, more than 90 operators of investment platforms are listed in the Central Bank register. Just over a year ago, there were 78.
In fact, there are two ways to invest in a business: buy shares in companies or give them loans. The first option in today’s conditions is more preferable than the second. This is due to the high key rate.
Loans to businesses work like a credit – only in this case, the company’s money is provided not by the bank, but by private investors. To attract financing, businesses have to compete with deposits and offer higher returns.
As a result, commercial loan rates reach 35% and above. With economic instability, such conditions may be unbearable and doom the project to bankruptcy. In this case, investors will not receive the expected profitability, and in the most negative scenario they will lose the money invested.
In this sense, buying shares is less risky. The investor becomes a co-owner of the business and does not receive much profitability at the moment, but over time the value of his share (especially in conditions of high inflation) grows.
The most promising in 2025 will be the share in the companies of the first cycle. They produce raw materials, from which they later make some products. For example, in the shoe industry, companies of the first cycle will be manufacturers of leather and rubber, and in furniture – manufacturers of wood and textile industries.
Why are companies of the first cycle attractive to the investor? They are more resilient because they have a market. Such companies are less likely to go bust – this will only happen if businesses in the chain before them face difficulties.
Franchising
Franchising is another area that has seen a resurgence recently. According to preliminary data, in 2024 the number of applications for franchises increased by more than 40% compared to 2023, and from 2022 – by more than 130%.
Several factors influenced the growth of interest in franchises.
First, due to sanctions and the departure of large brands, the demand for ready-made business systems has increased. Further, franchises can optimize costs in unstable economic conditions. Franchisee costs accumulate around a single brand, and it enjoys wholesale prices.
In addition, the market lacks network companies with high-quality automated technologies. Therefore, a business that does not want to build business processes independently is ready to buy them.
Large franchise networks bring low profitability, but they are stable, and in 5-7 years you can reach payback.
Conclusions
Market turbulence creates not only difficulties for business, but also opportunities. When the market fluctuates, its structure changes: previously stable players face negative consequences, but new companies and products have a chance to win their share.
It is impossible to choose the best or worst for the investor from the listed strategies. These are different tools that cover different needs and are suitable for people with various psychological sweats.
For risky people, a venture is suitable. It gives more profitability, but the risks are high. If there is a need for basic investment, loans can be considered. If you want to delve into business structures, this is closer to shares. Well, for those who want to become an entrepreneur in the future, a franchise is suitable.
But what about deposits? In fact, a bank deposit is not an investment. This is a way to save money, but not to increase capital.
By Maria Kuznetsova, investor, founder of the consulting company and crowdfunding platform Frontiers, and Daniil Ladin, financial analyst, advisor at the investment company Frontiers