The Russian market of direct and venture investments fell by almost 10%

The Russian Venture Investment Association (RAVI), with the support of RVC, presented the annual report "Overview of the Direct and Venture Investment Market for 9 months of 2015" at the Regional Innovation Infrastructure Development Forum "Ecosystem of Innovations" (Sochi, December 10-11). The review was prepared according to the methodology of collecting and analyzing the main parameters of the activities of Russian venture funds, which ensures comparability of the results of research on the Russian market of direct and venture investments. The methodology was developed by a Joint analytical group created on the initiative of RAVI and RVC. In total, the review took into account data on more than 300 funds included in the expert base of the Russian venture market created by RAVI.

The authors of the study note that immediately after the Russian direct and venture capital investment market demonstrated one of the highest activity indicators for the entire observation period in 2012, a decrease in the pace of its development began, which persists to this day.

The results of the analysis of the Russian direct and venture capital investment market for the first 9 months of 2015 demonstrate the deterioration of key indicators. Thus, the total capital of existing private equity and venture capital funds decreased by $2.4 billion in the first 9 months of 2015. compared to the same period in 2014, it amounted to $26.8 billion.

Against the background of the active growth of previous years, the growth rates of the total capital of venture funds decreased significantly and reached the lowest values in the entire history of observations in the first 9 months of 2015 − minus 6.9% (for comparison, in 2013 − 22%). The decline in these indicators was significantly influenced by the devaluation of the national currency, the "overheating" of the venture market in 2012, when there was a rapid increase in the number and volume of funds that re-entered the market, as well as difficulties associated with the availability of capital to create new funds, primarily in foreign markets. In 2015, many global investment structures suspended or curtailed their activities in the Russian market. At the same time, the pace of raising capital to create new venture funds in key foreign markets is still quite high - the volume of funds raised in the US market for the first 9 months of 2015 has already amounted to more than $ 23 billion, or 150% of the level of 2014.

The number of private equity and venture capital funds increased slightly in Russia – by only 3.5% compared to last year, and exclusively due to the creation of new venture funds. For comparison, the growth in this indicator in 2014 was 8.1%, in 2013 – 20.6%, in 2012 – 46.7%. To date, there are 360 private equity and venture capital funds operating in Russia.

In absolute terms, the number of new venture funds for the first 9 months of 2015 was quite large (16 funds versus 31 funds in 2014). The total volume of new venture funds reached $294 million. The authors note that state capital prevails in newly created venture funds – it accounts for two or three of their volumes. We are talking, among other things, about the funds of RVC, which actively created new funds in 2014-2015 in the form of an investment partnership agreement (DIT).

There is also a decrease in the investment activity of funds. For 9 months in total, $ 405 million was invested, which was only 31% of the same indicator in 2014. At the same time, the average size of the check also decreased from $21.14 million in 2012 to $2.62 million in 2015.

The total number of investments in the first 9 months of 2015 amounted to 66% of the level of 2014 – 155 transactions compared to 234 in 2014. 146 investment transactions were classified as venture, a third of them were secured by funds with the participation of state capital.

The industry preferences of domestic venture investors remain. The information technology sector continues to receive increased attention: such projects account for 78% of the volume of investments and 71% of the total number of transactions. Projects of "high-tech" industries (biotechnology, medicine/healthcare, industrial equipment, chemical materials, ecology, energy) account for 19% of the total volume and 21% of the total number of transactions.

At the same time, since 2012, there has been a gradual leveling of the stage imbalances in the volume of venture investments. According to the authors, the correction is largely due to the activation of seed funds created with the participation of the state.

In total, according to the results of 9 months of 2015, exit deals involving private equity and venture capital funds from 20 companies were recorded (50% of the 2014 level). The achieved value of the number of exits should be recognized as a good result against the background of crisis phenomena in the industry. However, it should be emphasized that the observed activity in the field of exits is obviously a consequence of the backlog of previous years.

"The report's data are hardly unexpected, since the state of affairs in the venture capital market is derived from the general economic situation in the country," said Gulnara Bikkulova, Director of the Department of Innovative Markets, Member of the Board of RVC. – At the same time, against this background, trends are emerging that should ensure the stability of the market in the long term. These include an increase in the number of exits through strategists, an increase in the volume of syndicated transactions and the alignment of the industry structure of transactions in favor of high-tech projects."

The full version of the report is published on the RVC website in the section "Analytics and Research".

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15.12.2015