Russian investors prefer foreign startups

Mean venture capital deal in Russian market worth $1.3 mio over H1 2018.

Ninety-seven deals worth a total of $93.4 mio were closed over the first six months of the year. The total scope of the venture capital ecosystem amounts to $200 mio, according to the annual MoneyTreeTM: Venture Capital Market Navigator issued by PwC and RBC. Experts note that the average value of a deal at the seed stage has doubled from $530K to $900K. The amount of investment at the startup stage has also significantly increased, from $830K to $1.33 mio. The review authors believe this indicates investors’ activity and their confidence in the market. However, it is too early to see a trend here. RBC Director General Alexander Povalko says that the venture capital market growth depends on whether institutional investors and corporations enter the market as well as on an attractive regulatory climate.

The number of entries during the first half-year period was quite low, with only six entries. However, according to Oleg Malyshev, Deals Leader at PwC Russia, the total scope of the entry deals reached $69 mio, which is comparable to the entire value of the deals closed in 2017. 

The research specifies that as before, the IT industry accounted for the largest number of deals in 2017 accumulating 84% of all venture capital investment. The industrial segment and biotechnology are seriously lagging behind, with 10% and 6%, respectively. At the same time, Russian funds invested in foreign projects three times more than in domestic startups. 

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