Russian Venture Market Enters an Exit Stage – Research by Fastlane Ventures
March 20, 2014
While the seed funding boom has ended, Russian investors are increasingly interested in Internet startups at late stages. In 2014-2015 RuNet will see more exits, according to Fastlane Ventures expectations from Russian Internet Deal Book.
A new research by Fastlane Ventures covers more than 600 deals made in Russian internet in 2012-2013. Based on this data, the research evaluates market volume and dynamics, the main trends and players.
- The market is becoming mature : deals in later stages (C, D, E) accounted for 45 % of total investment volume in 2013 , while in 2011 there were only 13% of such “mature” deals. We expect that in the years 2014-2015 many of companies invested in late stages will reach exits.
- An increasing number of mergers, acquisitions and secondary deals. There were 30 liquidity events in 2013 compared to only 10 as of 2011.
- More investments in financial and advertising services , as well as games. At the same time, e-commerce is becoming less popular. In 2013, investments in e-commerce accounted for 58 % of all investments in RuNet, 10% less than in 2012.
- 1 deal a day – is the average for investments in the Russian Internet .
- The share of Russian money in RuNet increased. 53% of all investments in Runet were of Russian origin in 2013, compared to 42% in 2012.
- No more free money from the state: in 2013 we saw at least 3 times less grants than in 2011
- The market growth has slowed down. While in 2011 the investments soared 130% a year, in 2013 we saw a modest growth of 4%. The seed stage boom is over, the market has reached more maturity.
Andrey Kulikov, Fastlane Ventures investment manager : « The Russian Internet is reaching a new stage of development. Venture capital funds based in 2010-2012 are completing now their first investment cycle, and will have to raise capital again in 2014-15. At the same time, there will be more exits. On average it takes about seven years from the foundation to the sale of a startup, therefore numerous companies created in 2006-2009 are now close to exit”.