Rating of Venture Capital Funds

October 2013

Analytical Report (full version)

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Analytical Report (full version)

Rating of Venture Capital Funds
Rating of Venture Capital Funds
October 2013

Rating of Venture Capital Funds

October 2013

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J’son and Partners Consulting presents the main results of venture capital market analysis in Russia and in the world.


In the research presented the comprehensive analysis of venture capital market infrastructure development in Russia and in the world. Differences are showed between regions and provided venture capital market evaluations by value of transactions and by number of deals closed.


General market structure and key market players

According to J’Son & Partners Consulting, USA in perspective will keep the leading position until 2015 among the venture capital market players. In the meantime Chinese market will grow very fast.



Taking into the consideration the attractiveness of industries; software, biotechnologies and media projects still are the most attractive for the U.S. venture capital funds and present more than half of all projects.



Despite of the fact that the American venture capital market is one of the most perspective markets, the number of venture funds for the last 10 years drastically decreased. Same trend is in Europe – for the last 12 years the number of funds lowered for 63%.


The infrastructure of venture capital market

Different platforms designed to support venture capital and venture entrepreneurs are analyzed in the full report.


Public institutes for venture business development

Main types of public and quasi-public organizations that support applied innovations:


       Network «center of excellence»;
       Centers for technology transfers;
       Seed funds;
       Public venture funds, and funds’ funds
       Universal institutes supporting innovations.


Transnational corporations

Large corporations can enter in innovative project by several means:

       Direct investments. The most risky, the possibility to receive the highest economic gain.
       Creation of small innovative companies by the corporation itself.
       Corporation can enter the operating venture fund, with a needed specialization.


The most popular examples of corporations that invest in the venture projects:

       Intel Capital;
       Google Ventures;
       Seed Fund Microsoft.


Technoparks, incubators, accelerators, university and research environment

Platforms for the development of innovative projects are:

       Technological centers (clusters);
       Innovation and Technology centers;
       Business Incubators;
       Business Accelerators.


The key tasks differ by object type, but in general are as follows:

       Help to receive the access to the most available offices and industry spaces;
       Informational support;
       Help in search of partners and providing services for “supporting” realization of innovative projects
       The expansion of potential range of investors;
       Profile specialists’ support;
       Financial support on the early stages of innovative projects development


Angel investors: number and dynamic of business-angels, industries for investing, volumes of financing

«Angel investors» or «business-angels» called private investors who are investing in start-ups at the earliest stages with the expectation of high returns on investment compared to traditional investment opportunities in the stock market.


The most active associations of business angels are the representatives of the United States, often investing in start-ups in Silicon Valley. Leaders in the number of transactions may be stated as follows: New York Angels, Tech Coast Angels, Launchpad Venture.



Online projects are the most popular sectors for investment (about 30% of the total number of transactions). They are the least capital intensive, thus have the potential of extremely rapid growth, enables business angel expect a positive effect on their investment in the short term (1-3 years).


Commonly used criteria in the classification of management companies is the total capitalization value of private equity (venture) investments under their control, which allows you to divide the management companies into three groups: small, medium and large.



Since 2006, the number of venture capital funds has increased threefold with a CAGR of 20%. During the same period, the total capitalization of the venture capital funds (including liquidated) increased almost fivefold.


Since 2009, steady increase noticed in Russia in both the number of transactions in the field of venture capital funds and their volume: In 2009, the total number of transactions was less than 50, and the total volume was $ 124 million, and in 2012 there were more than 130 deals for $ 397 million in 2015, the trend is expected to continue to increase investment in the IT sector.


The structure of venture capital investments in the Russian Federation

The total venture capital investment volume in 2012 was $ 397 million, of which about 60 % were in the telecommunication sector.


Dynamics of venture capital investments volume in 2011-2012 shows a “jump” increase in the total volume of investments in the agricultural sector and an equally sharp drop in investments in the financial services industry. Also worth attention the increase and a half times the expand of the volume of investments in the ICT sector, in which the largest increase in the number of transactions and the volume of attracted venture capital funds occurred in the sector of mobile applications and social networking. This is due to saturation of the portfolio companies in the sector of electronic commerce and the need to increase industry diversification.



The interest of investors and volume of financing deals in IT sector still will be sustainable in 2013.


Growth trend for investor interest and funding transactions in the IT sector will continue in 2013. According to J'Son & Partners Consulting, in 2013, growth in the number of transactions of venture capital industry in the IT sector may slow down. It is expected to shift the focus of investors from e-commerce to cloud technology.


Throughout this period, investors in Russia are the main driving force behind the development of the Russian market of venture capital. At the same time, an increase in the number of transactions involving foreign investors have been noticed, the most active investors are in the U.S. and Germany. In 2011 6 transactions were entered into with the investors from France, Canada, Sweden and Switzerland, as well as 20 transactions involving investors registered in offshore jurisdictions (Cyprus, the Netherlands, Virgin Islands). The interest in Russian start-ups from Asian investors is growing (in 2012 recorded the transactions with the Japanese venture capital funds) in comparison with 2011.


Detailed results of the research are presented in the full version of the report: “Rating of Venture Capital Funds” (90 p.)


1. Methodology
2. The world market of venture capital funds
       2.1. General market structure and key players
       2.2. Public institutions of venture business development
       2.3. The role of transnational corporations
       2.4. Infrastructure: technology parks, incubators, accelerators, university and research
       2.5. Venture companies and government funds
3. Government regulation and stimulation of venture capital funds
       3.1. The regulatory environment
       3.2. Tax incentives
       3.3. Development of technoparks’ and incubators’ infrastructure
       3.4. The development of the information space to support and promote innovation, promotion
              of education in the field of innovation
       3.5. Other methods
4. New technological trends in Russia and in the world
       4.1. ICT
       4.2. Electric Power industry
       4.3. Biotechnology
       4.4. Transport
5. Classification of management companies in Russian Federation
6. Trends, tendencies and dynamics of the Russian market of venture capital funds in
7. The structure of investments of venture capital funds
       7.1. By sectors of the Russian economy
       7.2. by investment stages
       7.3. by geolocation of deals
8. The influence of business angels
9. Infrastructure: technology parks, incubators, accelerators, university and research
       9.1. Technoparks
       9.2. Business incubators
10. RVC. Influence on the market
11. Russian venture funds rating
12. Profiles of the venture capital funds market leaders
List of companies mentioned in the report


List of Figures

Fig 1. Volume of venture investments in the leading countries, 2006-2012, bln.USD
Fig 2. Number of deals by stages in USA, units
Fig 3. Deals structure by industries on USA market
Fig 4. Dynamics of venture capital funds number in USA
Fig 5. Number of venture capital funds in Europe in 1999 and 2011
Fig 6. Return of investments in Europe, 2012
Fig 7. The structure of the cluster and the interaction of innovation infrastructure facilities
Fig 8. Geolocation: technoparks and remoteness form the city in the world
Fig 9. Geography of companies coming into the parks, world statistics
Fig 10. Requirements for companies – for candidates to be included in technopark
Fig 11. The total volume of venture capital investments, bln. USD
Fig 12. «Angel investments» by sectors, classification by number of deals, 2012
Fig 13. Dynamics of “big data” market volume, 2012 – 2017, bln.USD
Fig 14. Dynamics of changes in the average speed of mobile network connections. The average speed of the mobile channel, kbit / s.
Fig 15. Segmentation of revenue from VoIP by region, the forecast for 2014
Fig 16. Dynamics of investment volumes in alternative energy sources, 2010-2015, bln. USD
Fig 17. World leaders by the biotechnology market volume, 2012, bln. USD
Fig 18. Dynamic of number of managing companies by capitalization, 2010-2015
Fig 19. Number of venture capital funds in Russian Federation
Fig 20. Number of venture capital funds in Russian Federation
Fig 21. Number of deals of venture capital funds
Fig 22 Volume of venture capital funds deals, mln. USD
Fig 23. Average volume of venture capital funds deals, mln. USD
Fig 24. Venture capital funds investments structure by economy sectors, by volume of investments, 2012
Fig 25. Venture capital funds investments structure by economy sectors, by number of deals, 2012
Fig 26. Average deal volume by industries, mln. USD
Fig 27. Venture capital funds investments structure in IT by sub-sectors, classification by deals volume, 2012, mln.USD
Fig 28. Dynamics of venture deals in IT-sector in 2011-2015, mln.USD
Fig 29. Diversification of deals by investing stages
Fig 30. Investment structure in ICT sector in 2012
Fig 31. Number of deals by geolocation of investors, % of the total number of deals, 2010-2015


List of tables

Table 1. Typology of development institutions
Table 2. Diversification of technoparks of certain type by geolocation
Table 3. Rating of incubators/accelerators
Table 4 The definition of venture capital financing
Table 5. Classification of venture funds by way of investing
Table 6. Venture capital funds-leaders
Table 7. The largest associations of business angels




This 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.