In 2023, the volume of investments in Russian startups decreased by 80% compared to 2022 and amounted to $84 million, according to data from the analytical platform Dsight. At the same time, the number of transactions increased by 20%, last year there were 175, of which 73% were projects in the sowing and pre-sowing stage. At the same time, the size of the checks has been reduced considerably.
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From the study “Venture Eurasia”, which Dsight carried out together with the alliance of commercial and technological companies RITA, the B1 agency, the law firm Nextos and the SberUnity stsrtap center, it follows that due to the difficult geopolitical situation, investors have reviewed their strategies and portfolios and reduced investment controls.
Thus, the average check was $0.48 (compared to $3 million in 2022), the median was $0.17 (compared to $0.6 million in 2022).
What risk mitigation tools are market participants using?
Under conditions of uncertainty, market participants use risk reduction mechanisms. For example, collective investments. That’s why crowdfunding platforms like Brainbox, Rounds and Zorko were of interest last year.
Who invested most actively in 2023
The number of transactions last year reached 175, 20% more than the result in 2022. Private funds became the most active, contributing 38% of the total investment volume. With their participation, 52 transactions were concluded. At the same time, the study highlights that in 2022 the number of transactions with these funds was slightly higher than -40%. The most active players in terms of the number of transactions were the IVF fund of the Republic of Tatarstan, Voskhod and Kama Flow.
For their part, business angels increased the number of transactions by 19% in 2023. The proportion of angel transactions in terms of investment volume reached 26%.
In 2023, state funds played an important role in the venture business: every fourth transaction was completed with their participation. At the same time, such funds (the Moscow Venture Investment Development Fund and the FIV of the Republic of Tatarstan) provided the smallest checks on the market.
What about foreign investments?
Last year, the interest of foreign investors in Russian projects was even lower than in 2022. There were only three such transactions, compared to 11 the previous year. Thus, a MedTech project raised $1.5 million from an international investment company. Likewise, the Educate Online project raised $640,000 from 27 business angels from the UMAY Angels Club. Veles.Finance, a platform for creating trading robots in the cryptocurrency market, received $0.5 million from the decentralized fund DF101).
What awaits the Russian risk market in 2024
Analysts predict:
- an increase in the number of transactions by 30%, 220 are expected by the end of the year;
- increased investment volumes: checks should increase by 20%;
- further growth in the number of crowdfunding transactions;
- corporate investments in early stage projects;
- emergence of atypical agreements.
In addition, investors expect that the amendments of the Ministry of Economic Development, which allow individuals and investment funds to participate in investment companies, will greatly simplify the procedure for direct and risk financing.
Author:
Natalia Gormaleva
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
