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bne IntelliNews – Study: VCs increasingly bet on Russian-founded startups operating abroad – rather than on domestic ones

bne IntelliNews - Study: VCs increasingly bet on Russian-founded startups operating abroad — rather than on domestic ones
Written by Publishing Team

The Untitled, one of the most established venture capital firms across Russia and Eastern Europe, has analyzed investment deals involving startups founded over the past 10 years in Russia or by Russian entrepreneurs. The research covered deals completed from December 2020 to November 2021. It was conducted jointly with The Untitled and Rusven, an influential Telegram channel covering industry news.

It is clear that the volume of investment in startups grew by about 3.5 times, reaching 85.2 billion Russian rubles ($1.1 billion) in the mentioned period. Up from 24.9 billion Russian rubles (about $330 million) over the past 12 months. This was due to an increase in the average ticket rather than the number of transactions (221, up from 203).

Foreign investment showed the most significant growth, accounting for just over half of the total volume of transactions between December 2020 and November 2021.

However, one should not look at the data too optimistically, says The Untitled.

“Early stage [pre-seed + seed] Investment in the Russian jurisdiction continues to decline. Most of the large transactions with startups of Russian origin take place in foreign jurisdictions,” notes Konstantin Senyushin, managing partner at The Untitled. which was established in Luxembourg.

Deal analysis also indicates that a large portion of the venture capital market consists of several very large late stage deals.

“The only really good news is that there has been an increase in early deals in foreign jurisdictions with Russian-origin startups/investors,” says the venture capitalist.

An untitled post highlights the following trends:

  • International investors are increasingly investing in Russian startups;
  • Russian private venture capital funds, corporate and corporate funds are increasingly active;
  • The activity of individual investors remains opaque;
  • Significantly less active state funds.

“It seems that the authorities’ interest in the venture capital market has weakened,” after a decade of active state involvement in financing start-ups. In fact, no new fund with state participation was launched in 2021, notes The Untitled.

This article first appeared in East and West digital news (EWDN), a partner publication of BNI IntelliNews.

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