Western investment funds have frozen activity in the Russian Federation, domestic hedge funds are investing less and less in IT start-ups in the context of a personnel crisis after a massive departure of specialists from the country, and in the technology market, mergers and acquisitions are replacing the investment boom.
From a detailed study by Kommersant, in which representatives of large investment firms participated, you can find out that:
- the average check for a project in the investment round was reduced 10 times (from 300–500 million rubles in 2021 to 20–30 million rubles in 20022, with the exception of institutional and large industry investors, whose check , by contrast, increased from $10.5 million to $14 million in 2022),
- the number of investors in the round has been halved (from two to one on average),
- how the number of transactions itself decreased (almost four times: from January to August, only 31 transactions against 121 for the same period in 2021).
These data are provided by the investment company A.Partners. The trend is also confirmed in other companies: for example, in the MTS hedge fund.
The MTS Fund itself has reduced the number of investment transactions, since “the opportunity to earn money with your help has become less obvious” (including because the funds of some large “corporate public investors” in the current situation have become high risk).
Another “symptom” of the current situation is the personnel crisis in the IT market due to the spring and summer migration of highly qualified specialists from the Russian Federation. Some experts also attribute the lack of investment in business to this aspect.
One of Kommersant’s sources believes that M&A transactions, which have become significantly more frequent in the market, will help recover from the departure of IT specialists (“Small technology companies will absorb the big players not only for the sake of development, but also for human capital”).
And since these are related things, after a series of mergers and acquisitions, the investment climate in the IT sector may also pick up. According to the head of the MTS fund, Islam Midov, “Free money is moving into mergers and acquisitions as many assets become available to redeem.”
However, quick changes should not be expected, as investors were frozen in advance. “While money is grudgingly allocated, the market is frozen”as Pavel Fedosov, Director of Strategic Projects of the Tsifra Group of Companies, rightly points out.