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Runa Capital tops the list of Russia's 25 most active funds

0 13 December 2013

At the Russian Venture Awards 2013, which were held last week, CEO Dmitry Falaleev presented the “Top-25 most active funds on the Russian Venture Market."

While Falaleev stressed that the list should not be considered an indicator of the quality of funds, and nor should it be seen as authoritative, as much information about funds’ activity is not in the public domain, he hopes that it will serve as a helpful overview, particularly to outsiders.

In order to be included in the Top-25 a fund had to have Russian founders, to have invested in at least 2 Russian projects in the past 2 years (Nov 2011 - Nov 2013) and to be more than a year old. Funds specifically oriented towards seed investments were also excluded. In addition to the Top-25, Top-10s were also compiled for seed funds, new funds and foreign funds. 

Runa Capital was ranked the most active Russian fund, with over $75 million invested in at least 27 projects.

Runa co-founder and managing partner Dmitry Chikhachev commented:

“The Russian venture market is growing up and becoming more transparent. I hope that soon there won’t be any need for “beauty contests” and investor ratings, because like in other parts of the world success will be measured by funds’ capitalization and income from investments. It was a packed year for the venture sector, with almost all professional investors adding to their portfolios. The results, of course, remain to be seen. It will probably be 6 years before we know the best deal of 2013 - that being the average period from investment to exit for investors in early stage projects.”

Among new funds, the most active was FRII, a Kremlin-sponsored accelerator for internet-related startups that made a small initial investment in all 34 companies that entered its 3 month program in October. Among new funds making larger investments Maxfield Capital, Flint Capital, QWave and 101Startup were particularly active.

Alexey Solovev, managing partner of Prostor Capital, which ranked 5th in the top-25, pointed out that

“looking at the list of active venture funds, new players make up around 25%. These new investors come from a range of backgrounds - former traders, creators of internet portals, businessmen from the IT industry and others - but, broadly speaking, you can put them in two groups - IT people or finance people.”

The seed funds top-10 shows the importance of super-angels and the state for new projects. 

The leading seed investor was business angel Igor Ryabenki’s Altair, while Igor Matsanyuk’s was also particularly active. 

Igor Ryabenki explains that      

“Russian super-angel funds operate in a similar way to American ones, choosing projects according to similar criteria. However, in the West super-angels and their partners invest up to $1m, which allows them to compete with venture investors for the best projects. In Russia these funds are more oriented towards seed (and sometimes pre-seed).”                                                                   

The state also plays an important role as a co-investor with private funds. The Moscow Seed Fund, state venture corporation RVC’s seed fund and the new FRII fund all operate in this way. 

Dmitry Polyakov, deputy manager of Softline Venture Partners, which has co-invested with the Moscow Seed Fund since summer 2012, said that 

“Before the Moscow Seed Fund appeared I can’t think of a single instance when innovative startups were financed through repayable loans. The fund, by accumulating financial resources, has provided us as a private investor with valuable support and helped us to invest in more projects.”

The list of the top-10 most active foreign funds shows that the Russia venture market remains a pretty domestic affair. Between them they funded less than 30 projects. However, there is plenty of interest in Russian abroad, and so foreign investment has the potential to increase as the market becomes more open and transparent. 

Source: Firrma, RBC Daily

Top image by Shutterstock

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