Results of RVC’s investment activities in 2018
RVC finds both Russian and foreign private innovation-ecosystem investors and market players to invest funds in the priority segments of the Russian economy, while also facilitating the development of new investment instruments in the national venture capital market. to this end, RVC invests in venture funds at the suggestion of market players and also initiates the creation of new funds with the involvement of professional investors and managers.
In 2018, the total capitalization of RVC-backed funds increased by RUB 13.7 billion to RUB 48.8 billion, RUB 26.6 billion of which was invested by RVC. As of the end of the year, RVC’s portfolio included 27 funds, including two funds in foreign jurisdictions.
3 new funds were created in 2018 with a capitalization of RUB 14.2 billion.
- RVC created the National Technology Initiative (NTI) Fund for investments in innovative projects that develop cross-cutting technologies in NTI markets.
- The Far East High-Tech Fund was created by RVC, Rusnano and the Far East Development Fund with a focus on investing in growing Russian companies that are developing technologies, products and services that are of current interest or have a promising future, including NTI projects.
- Together with Da Vinci Capital, RVC created a new fund – the Da Vinci Pre-IPO Tech Fund – for investment in late-stage technology projects. Priority segments for investment include business IT solutions, fintech and blockchain, smart mobility, on-demand economy services, cross-industry B2B solutions based on Internet of things (IoT) and big data technologies, artificial intelligence, AR/VR and cybersecurity.
In addition, Phystech Ventures and North Energy Ventures launched a joint fund called Terra Fund II, with a capitalization of USD 40 million. The fund has 24 investors, including seven new investors and 17 investors who had previously worked with Phystech Ventures and North Energy Ventures. RVC is one of the investors in Terra Fund II.
RVC also began work on the creation of the Education Technologies Development Fund, which was presented at the end of 2018. The fund will be established through the Human Resources and Education action plan as part of the Digital Economy of the Russian Federation programme. The goal of the fund is to develop leading education technologies and ensure a systematic approach to their implementation. The fund’s target capitalization will be RUB 7 billion.
Work also got under way on the creation of a fund to support innovative projects in the pharmaceutical and medical industries together with the Ministry of Industry and Trade of the Russian Federation. The fund will be established as part a programme called “Development of the Medical and Pharmaceutical Industry for 2013–2020”.
RVC is an integral and professional market player, a reliable partner; it is influenced in a certain bureaucratic way by state financing, but it makes up for this through stability, reliability and consistency. Given the increased creation of new funds, RVC has taken on a fundamental role. We are inspired by the emerging trend of moving away from providing information in the direction of investment activities.Peter Lukyanov, Managing Partner of the Terra Fund II
Far East Fund for the Development and Implementation of High Technologies
On 25 May 2018, Rusnano, RVC and the Fund for the Development of the Far East and Baikal Regions signed an agreement on the Far East Fund for the Development and Implementation of High Technologies.
The fund was established at the instruction of Russian President Vladimir Putin in order to develop the innovation system in Russia’s Far East, to introduce advanced technologies and to increase the share of high-tech products in the gross regional product.
The fund takes the form of an investment partnership; Rusnano and the Far East Development Fund are the founders of the managing partner (GP). The fund’s investment focus centres on projects in the field of nanotechnologies, as well as projects in NTI priority markets, including unmanned vehicles, neurotechnologies, advanced production technologies, intelligent energy and other high-tech processes.
- Target volume: RUB 10 billion
- Investment period: four years
- Amount of investment in one project: not more than 10% of the fund (not more than RUB 490 million)
The fund has an ambitious goal: to create a new cluster in a region with good educational, scientific and technological potential but poor innovation at this point. As our decade of experience building Russia’s nanotechnology industry shows, to solve problems on this scale, it’s not enough to start up a certain number of companies – even if they’re outfitted with state-of-the-art equipment and produce the most advanced products available. What’s needed is an integrated approach that, in addition to the establishment of such companies, includes infrastructure, personnel and a regulatory framework. Rusnano is capable of doing all of this, and I am confident that the fund will make a considerable contribution to transforming Russia’s Far East into a technologically developed and competitive macro-region.Anatoly Chubais, Chairman of Rusnano’s Management Board
National Technology Initiative Fund
The National Technology Initiative Fund was created by RVC to support innovative projects that develop cross-cutting technologies that are critical to the formation of new NTI markets. They include technologies for the storage and analyzis of big data, artificial intelligence, blockchain, quantum technologies, new energy sources, robotics, virtual- and augmented-reality technologies and neurotechnology. According to its investment strategy, the NTI Fund invests in Russian projects at the seed and early growth stages.
The fund is managed by the Kama Flow Group. As managing partner, Kama Flow won RUB 600 million in backing from the fund’s first private co-investors, including GazServiceComposite and Lomonosov Capital. Kama Flow has also invested RUB 50 million in the fund.
- Size of the fund and the amount of co-investors’ investments directly into the equity of the fund’s portfolio companies: RUB 3.5 billion, with RUB 1.5 billion in NTI subsidies invested by RVC’s InfraFund
- The fund was created as an investment partnership for a period of 10 years;
- Investment period: five years;
- Amount of investments in one portfolio company: no more than 10% of the total investment commitments
Being selected as the management company for the NTI Venture Fund was an important milestone for us, first, because of serious competition – after all, the strongest teams in the market took part in the competition – and second, because we understand the responsibility that comes with this project. The NTI Fund should become one of the catalysts for the country’s technological development, supporting and accelerating the growth of Russian companies that have what it takes to be global leaders. At the same time, the Fund should work according to the logic of classical venture investment and demonstrate solid performance from a commercial point of view. With the expertise and competencies that we have gained over the course of five years of investment in technology start-ups, we are fully capable of meeting these challenges.Eugene Borisov, Business Development Director, Kama Flow
Da Vinci Pre-IPO Tech Fund
The Da Vinci Pre-IPO Tech Fund, created by RVC together with Da Vinci Capital, was the first fund created under RVC’s renewed investment strategy, and it is the largest fund in the Company’s history. It focuses on investments in growing technology companies with potential for global scaling and IPOs. Priority segments for investment include business IT solutions, fintech and blockchain, smart mobility, on-demand economy services, cross-industry B2B solutions based on IoT and big data technologies, artificial intelligence, AR/VR and cybersecurity.
- Target volume: RUB 6 billion
- RVC’s share: RUB 1.5 billion
- At least 55% of the fund’s equity will be invested in companies at the series C and pre-IPO stages
- The fund aims to develop a portfolio of 10 technology companies within five
- Period of the fund’s operations: 10 years.
The Da Vinci Pre-IPO Tech Fund was the first fund created under the Company’s investment strategy that was updated last summer, and it is the largest fund in RVC’s history. The fund is focused on investments in mature companies, and it offers us, above all, an opportunity to influence market imbalances associated with the lack of tools to support technology companies in the scaling, international expansion and IPO preparation stages. We are pleased to continue cooperation with the professional team at Da Vinci Capital, one of the leaders in Russia’s venture capital market, with a wealth of experience in asset management and a history of successful exits.Alexey Basov, RVC’s Deputy CEO and Investment Director
Results of the investment activities of RVC-backed funds
RVC-backed funds approved investments in 32 portfolio companies worth a total of more than RUB 2 billion, which exceeded 2017 investments by 40% (RUB 1.4 billion invested in 24 portfolio companies).
- In September 2018, Da Vinci Capital, together with Inventure Partners, invested in Gett, a global ride-sharing app.
- The Skolkovo Ventures Industrial Fund, in partnership with Rusnano Sistema SICAR, invested USD 8 million in IVideon, the developer of a cloud-based video surveillance solution.
- The RBF Ventures Russian-Belarusian Venture Investment Fund completed a series of transactions, including an investment of RUB 25 million
in AgroDroneGroup, a developer of agricultural dronesIn 2018, RVC-backed funds made 30 exits from portfolio companies worth a total value of RUB 1.7 billion (compared to six exits in 2017), 21 of which had positive financial results. In September 2018, for example, RBV Capital, established with the financial backing of RVC and R-Pharm, sold Bonti, a developer of botulinum toxins, to the pharmaceutical giant Allergan; the deal’s initial payment amounted to USD 195 million. The Leader-Innovations Fund announced the sale of a stake in Platius LLC (the Plazius brand) to Sberbank of Russia).
|Fund name||Fund amount as of the end of 2018, RUB mln|
|RVC Seed Fund||1,982.000|
|Civil Technologies MIC||500.000|
|Funds in foreign jurisdictions|
|Russian Venture Capital I LP||2,779.633|
|RVC IVFRT LP||1,454.853|
|Closed-end venture funds (CE VF)|
|Bioprocess Capital Ventures CE VF||3,000.000|
|VTB – Venture Capital Fund CE VF||3,061.000|
|Maxwell Biotech CE VF||1,224.400|
|Innovation Leader CE VF||1,885.800|
|S-Group Ventures CE VF||1,619.994|
|IPA funds (sector-specific funds and RBF Ventures)|
|RusBio Ventures IPA||2,070.700|
|Da Vinci Pre-IPO Fund||4,272.914|
|Da Vinci Pre-IPO Tech Fund||6,000.000|
|RBF Ventures (Russian-Belarusian Venture Investment Fund)||1,400.000|
|Skolkovo Venture Fund – IT I||2,303.030|
|Skolkovo Venture Fund – Agrotechnological I||955.000|
|Skolkovo Venture Fund – Industrial I||2,424.242|
|Far East Fund for the Development and Implementation of High Technologies||4,900.500|
|National Technology Initiative Venture Fund||1,870.000|
|Softline Seed Fund IPA||136.000|
|High-Tech Seed Fund IPA||133.600|
|ACP Seed Fund IPA||33.400|
|Venture Fund Accelerator IPA||133.400|
|Life Sciences Seed Fund IPA||133.600|
|Tomsk State University Seed Fund IPA||33.400|
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