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Venture market is a key source for innovational project financing. Investors’ activity decreased in 1H2014. In comparison with the same period last years, the number of deals and their volume dropped (241.3 mln USD). J’son & Partners Consulting presents brief results of the research: Venture market in Russia, results of 1H2014.

 

Methodology

 

The analysis includes the actual data of received venture investments made by business angels, investment companies, private, corporate and government venture funds during one round of investments. If a company received financing in two or more rounds, each round was counted as a separate deal. Under venture financing was considered a purchase of share, charter capital of new or growing companies, and the purchased share was less then controlling share. The investments are mainly aimed at business development and not on the buyout of current shareholders (founders) of the company.

 

Investments made by companies’ founders in the total volume of new financing, private equity, made in venture companies on the mature stage of development, had also been considered.

 

J’son & Partners Consulting experts specified the following types of deals by geographical principle:

 

1)    Russian startup deals;

 

2)    Investments in foreign start ups – participation of Russian investors including syndicated deals.

 

Investments in Russian projects

 

The following deals with Russian companies were excluded by J’son & Partners Consulting from the estimations of venture investments market:

 

1)    Deals with Vkontakte (due to the conflict between shareholders);

 

2)    Investments of MTS and AFK System in internet shop Ozon, because the deal belongs to private equity deal;

 

3)    The purchase of Parallels share by American company Ingram Micro, the deal is not a venture deal.  

 

J’son & Partners Consulting analysts allocated 120 deals in 1H2014 for the total amount of 241.3 mln USD, 110 of them – attracting of new financing (cash-in) on the total amount of 160 mln USD and 10 deals on sale of existing shares (exits) on the amount 81.3 mln USD. Internet Initiatives Development Fund (IIDF) made the max amount of investments – 37 deals.

 

The analysis of investors’ number and structure showed the increasing role of government funds, their share increased 2 times – from 18% deals till  36%. All other market participants showed the decrease of activity.

 

 

The share of “exits” increased in comparison with 1H2013. Analysts of J’son & Partners Consulting explain this by market maturity. Average cost of “exits” decreased in comparison with the same period in 2013, now it is 8.1 mln USD.

 

The number of “exits” increased but number of cash-in deals decreased in 1H2014 vs 1H2013. Two fold decrease from 378 mln USD till 160 mln USD.

 

 

Share of ICT projects decreased in $ and pcs. according to industry’s analysis of financed projects. J’son & Partners Consulting consultants paid attention to growth of investments in medical projects – 8% of the market ($) and 3% in number of deals.

 

 

Analysis of investments’ stages showed that the largest part of investments were in the seed stage that is the same as in 2013. Average volume of investments on seed stage slightly increased – from 180 thousand till 240 thousand USD. The number of investments on Round B decreased in 1H2014 vs 1H2013 and Round A increased. Average “bill” almost didn’t change.

 

 

Investments in foreign projects

 

The number of investments in foreign projects made by Russian investors increased both in $ and pcs.

 

 

 

Meanwhile, share of syndicated deals changed a little: increased from 28% till 35% in pcs. and decreased from 53% till 48% in $.

 

Conclusion

 

Russian venture market showed stagnation: decrease in number and volume of deals, while government funds are becoming more and more important. J’son & Partners Consulting specified increasing number of exits from previously made investments.

 

Participation of Russian investors in foreign processes is a positive factor: the number of deals with Russian capital increased from 18 till 23 in 1H2014 vs 1H2013.

 

Detailed results of the Research are presented in the full version of the Report: Venture market in Russia: results of 1H2014

 

Report aimed at venture funds, private equity funds, business angels, start-up founders

 

Content of the report:

 

Methodology and sources of information

Chapter 1. Main activities on Russian venture market in 1H2014

Chapter 2. Russian venture market in 1H2014

2.1.    Brief results of 1H2014

2.2.    Market volume, pcs. and $

2.3.    Dynamics of venture deals in 1H2014

2.4.    Classification of deals by round of investments

2.5.    Classification of deals by volume of investments

2.6.    Largest venture deals in Russia in 2013

Chapter 3. Analysis of Russian projects in 1H2014

3.1.    General description of projects

3.2.    Industry structure of projects

3.3.    Analysis of investments in B2B and B2C segments

3.4.    Support of mobile apps

3.5.    Analysis of “survived” projects, launched in 1H2013

Chapter 4. Investors on venture market in Russia in 1H2014

4.1.    General description of investors

4.2.    Geographical classification of investors

4.3.    Investors’ typology

4.4.    Profiles of largest investors

Chapter 5. Cash-out deals in 1H2014

5.1.    General description of investors’ exists in 1H2014

5.2.    Largest “exits”

Chapter 6. Foreign projects

6.1.    Analysis of foreign projects in 1H2014

6.2.    Structure of foreign projects

Chapter7. Syndicated deals

7.1.    General description, 1H2014 

7.2.    Largest syndicated deals

7.3.    Syndicated deals with foreign investors

7.4.    Syndicated deals in foreign projects

Conclusion

List of companies mentioned in the report

 

 

his Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.