The investment market in Russian startups has fallen by a third. Hope for the state?

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For six months - from January to June - 2019, the number of public transactions in which domestic startups based on the use of high technologies took part decreased by 35%, compared with the same period in 2018. Growth is seen only in the segment of state venture.

• Corporations made 13 transactions for 1805 million rubles;
• Private foundations - 9, for 1,085 million;
• State funds - 12 per 1065 million;
• Foreign investment - 6 per 815 million;
• Nearly 350 million rubles were attracted from the private sector under 9 contracts;
• Accelerators invested 192.1 million in 34 transactions.

The year before last, the projects of Russian developers were much more fortunate - the amount of investments exceeded 5 billion rubles (if we also consider the failed transaction of VEB of the Russian Federation with New Cloud Technologies in the amount of almost 2 billion rubles).

State funds have concluded 12 agreements worth more than 1 billion rubles. This is more than in 2018 - over the same period, the figure did not exceed 847 million. Experts note that the participation and activity of the public sector in the domestic market for financial investments in startups is growing.

The largest Russian deal in the first half of 2019 - more than 300 million rubles, which received “Personal Medication & Health Management” - a startup in the field of medicine. The investor was the NTI Fund.

• Domestic investments - almost 85% worth more than 4495 million rubles;
• Foreign investments - more than 15%, sum - 815 million;
• Transactions with a known amount - almost 87%, 72 transactions;
• Transactions with an unknown amount - more than 13%, 11 transactions.

The private sector has moderate activity - for the six months of 2019, 9 agreements were concluded for 348 million rubles, while for the same period the year before last, almost 1.3 billion. The record was set by Anton Alikov, partner of Blackfort Capital (Switzerland), having invested more than 195 million in the Russian Internet agency Sidorin Lab.

Investments by foreign investors took place on the fact of 6 transactions (of which it is known) for 815 million rubles. A year earlier, the figure exceeded 1 billion rubles. The largest agreement was entered into by business associations under the management of the Haxus Foundation Yuri Gursky and the young studio Prisma Labs worth 390 million.

Number of sales in companies:

• 9 exits - 2019;
• 10 exits - for the same period in 2018.

Trend No. 1: a decrease in the number of transactions by almost half

The volume of the market for investments in new projects of domestic production for the first six months of 2019 exceeded 5 billion rubles. But in the same period the year before last, it exceeded 8 billion. A total of 83 contracts were announced, the amount of 11 of them remain secret.

The number of transactions decreased by 45% compared to last year, which in cash exceeds 34%.

Trend # 2: Corporate Sector Reduces Activity

In 2018, corporations invested almost 4 billion rubles in 23 domestic startups.

In 2019, only 13 (less than 2 billion).

Distribution of investment categories (in millions of rubles, by volume of funds):

1. 1700.5 - business solutions;
2.617.1 - AI;
3. 522.5 - transport;
4. 469 - medicine;
5. 422 - education;
6. 390 - industry;
7. 331 - work, HR;
8. 212 - marketplaces;
9. 189.7 - electronic commerce;
10. 130 - real estate;
11. 78 - logistics and delivery;
12. 75 - communications;
13. 65 - agricultural technologies;
14. 38.6 - robotics;
15. 32 - video-audio;
16. 26.6 - advertising;
17.8.6 - VR / AR;
18. 2.5 - finance.

Trend # 3: individuals are being careful

In the indicated period, 9 contracts with the participation of “business angels” for 348 million rubles were announced. In real money terms, the failure in this segment relative to 2018 reaches almost 73%, which indicates intense cautiousness of individuals.

Trend # 4: reduced investment flow from abroad

In 2018, the inflow of foreign capital to young Russian companies reached 1.16 billion rubles. Such a significant amount of foreign investment was provided by only 2 transactions - an agreement with Grab (542 million) and 338 million attracted by ExoAtlet from Cosmo and Company (Korea).

And 2019 showed a decline of almost 30% - up to 815 million.

Trend # 5: Public Funds Participation Sector is Growing

The volume of investments of state venture funds compared with the year before last increased by more than 20%, exceeding 1 billion rubles. But the number of transactions decreased - it was 18, it became - 12. The average check for the value of transactions in which state funds and structures also participated increased.

Forecasts

According to the generalized opinion of venture investors, it is not worth panic and lament. A fall in any kind of market is a normal and temporary phenomenon. In the near future, the following events should be expected:

1. Expectation of market growth of at least 30%, if you do not take into account one-time transactions. The main determinant of growth will be the activity of Asian funds.

3. Market growth will be provided by state funds, including RDIF, as well as corporate investments.

4. Growth will be promoted by stimulation at the state level, if such programs are adopted.

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