Private Equity & Venture Capital in Russia 2014
Contents 1. Market overview 2. Case study: E-Commerce 3. VC trends 2
LIST NAIMA National Alternative Investment Management Association, a non-profit partnership representing alternative investment firms and service providers committed to the growth of long-term capital in Russia OUR MEMBERS: NAIMA was set up in 2012 by leading PE and VC funds in Russia with the support of international law and consulting firms, and in close cooperation with international industry partners and associations. The objectives of the association are as follows: draw the attention of Russian institutional investors (pension funds, banks, insurance companies and development institutions) to the direct investment market; promote the Russian direct investment market internationally and ensure appropriate positioning for Russia among other emerging markets; create a more favorable legal environment for capital raising, deal structuring and project management by funds registered in Russia and other jurisdictions; establish professional standards of corporate governance, reporting and compliance for responsible investment, support for professional training and the creation of a certification system for specialists in alternative investments.
General features of funds Funds by asset class, in numbers Funds by type, in numbers 5 20 8 22 real estate 139 175 venture capital growth 175 164 PE mezzanine VC distressed fund of funds There are 72 not active funds (closed or stopped)
General features of PE funds PE funds by LP, in numbers 7 4 Traditional (Private) 61 85 Captive/ Family office (Private) State PPP PE funds by origin, in numbers PE funds by sector focus, in numbers 36 128 Russian International 14 10 29 27 84 Multi TMT Industial Infrustructure Other* *Natural resources, Finance, Agriculture, FMCG, Healthcare
General features of VC funds 11 VC funds by LP, in numbers 18 8 24 114 Traditional (Private) Captive/ Family office (Private) Corporate Fund State PPP VC funds by origin, in numbers 8 VC funds by sector focus, in numbers 10 20 155 Russian International 97 44 16 Multi Healthcare / Biotech Software / Internet Industrial Other* *Cleantech, electronics/ robotics, infrustructure, Edtech, Fintech
11 months 2014 results Almost 94% of the deals were in IT Software/Internet B2C was the most popular segment with the share of 65% of VC Investments Most investors were Private or Corporate with the shares of 68% and 23% respectively Average deal size was $2.2m $607M invested 279 deals closed Software/Internet B2C $394m Software/Internet B2B $103m Other IT $44 m Computer Tech, hardware $28.4m Biotech $20m Industrial tech $16.4m Other Tech $1.2m Angel $7m Public $24m PPP $23m Corporate $140m Private $413m Source: RMG Partners
VC investments in software/internet 450 400 350 Social Media Platform/Middleware 300 Enterprise management software Marketing/Advertising 250 Other B2C Internet services/software2 Other business software 200 Other B2B software Other B2C Internet services/software 150 100 E-COMMERCE Search/Recommendations Content providers Education 50 0 Software/Internet B2C OTHER B2B SOFTWARE Software/Internet B2B E-commerce Source: RMG Partners
Russian VC investments (US$m) 450 140 400 350 128 120 300 250 200 150 100 50 158 101 222 90 385 86 97 72 53 142 149 139 154 99 187 109 79 127 70 174 81 100 80 60 40 20 Total deal value Number of deals 0 1q 2012 2q 2012 3q 2012 4q 2012 1q 2013 2q 2013 3q 2013 4q 2013 1q 2014 2q 2014 3q 2014 0 Source: RMG Partners
The most active funds of 2014
Investment in the e-commerce segment: Still a high level in 2014 Total investment amount to exceed that of 2013 ($235 million) Main deals: $150 million from AFK Sistema and MTS $40 million from Anatoly Goncharov and other Russian investors $20 million from Ulmart $12 million from Vaizra Capital $7 million from EBRD and MCI $7 million from e.ventures, Global Founders Capital, Holtzbrinck Ventures + InVenture Partners. Undisclosed stake acquired by Naspers
The "invest-abroad" trend gets stronger The DST school: More and more Russian money is invested abroad; the trend accelerated in 2014 The trend is even followed by funds that were initially focusing on Russia / CIS Some funds now reject the Russia label and define themselves as purely global funds.
Western funds: From sanction-driven retreat to confirmed commitment to Russia Bessemer: New risks, but no stopping Intel Capital: Not involved in politics Mangrove: Still working in Russia Tiger Global Management: Withdrew from Wikimart EBRD embarrassed: To leave (Rusnano project) or not to leave (Webinar.ru)?
Russian venture capital market overview includes a rundown of Russia s venture capital market The primary goal of this report is to make Russia s innovative sector more alluring for both foreign and domestic investors and increase the efficiency of contacts between investors and innovative companies seeking financing. The main barrier to growth of Russia s venture capital market is the lack of objective information. Foreign and domestic investors do not have sufficient reliable data and analytical materials on innovative markets and projects in Russia. This slows down the search for investment targets, makes investment decisions more difficult, increases costs for project analysis and due diligence, and restricts the size of the pool of potential venture investors KEY PARAMETERS Volume: 20+ pages Languages: EN, RU Release: Each quarter / 4 issues per year Formats: Electronic Paper size: A4 Free subscription MAIN MEDIA & DISTRIBUTION PARTNERS RMG client database East-West Digital News (EWDN) subscribers database RMG online resources, RMG mobile application (EN, RUS) Partnership with Marchmont Innovation News, Moscow Seed Fund, Bargan News, NAIMA and others (EN, RUS). Media partners support offers active links on company web-site following the report location RMG Media database (EN, RUS) TARGET AUDIENCE Russian Venture Capital Market Overview is focused on International and Russian target audience: Investors: investment funds, Venture & Private Equity funds, banks, financial groups, family offices & other Venture entrepreneurs, startups Governmental and market development institutes Consultants and service providers on financial market Non-profit organizations and associations, state institutions, state controlling entities, stakeholders
THANK YOU FOR YOUR ATTENTION! Arseniy Dabbakh RMG Partners ad@rmg-partners.ru Adrien Henni EWDN.COM editor@ewdn.com