Rye, Man & Gor Securities, a Russian investment firm, and East-West Digital News, an international resource on Russia’s IT, have issued a report on the status and trends of Russia’s venture market in 1Q 2014.
Here are the key takeouts from their joint report obtained by Marchmont News from RMG (please see full version here: Russian Venture Capital Market Overview
• Total venture capital decreased dramatically in the first quarter of 2014: the number of deals was down by 38% compared with the previous quarter (the drop affected all stages) and the total value of deals was down by 42% as the situation in the Russian economy worsened.
• Market decline was slowed down by investments made by the Internet Initiatives Development Fund (IIDF) in February 2014.
• The Russian venture market remains IT-oriented, but the share of technology has increased to 44% of total deal value.
• The Russian government continued to channel most of its financial assistance to early-stage technology projects, compensating lack of interest in this segment from other investors.
• Average deal value was almost unchanged despite a decrease in the total number and volume of deals.
“Russia’s VC market, which is becoming more and more mature and efficient, remains fundamentally attractive to both foreign and domestic investors. However, the lack of informational transparency is still a major obstacle impeding its healthy development,” said Arseniy Dabbakh, Director of Corporate Finance at Rye, Man & Gor Securities.
“In spite of the recent international turmoil, the Russian venture scene remains very active – as witnessed this quarter by Ozon’s $150m round of financing,” noted East-West Digital News chief editor Adrien Henni.