Total venture investment in Russia's market in the three quarters of 2012 amounted to USD 495 million.
The second review MoneyTreeTM: Venture Capital Market Navigator prepared by PwC's Centre for Technology and Innovation (PwC CTI) and RVC analyses venture investments in Russia for the three quarters of 2012 in the IT sector and extends the research scope over another two sectors, namely, biotechnologies and industrial technologies.
According to the report, the IT sector retains a leading position in terms of venture capital investment: for the three quarters of 2012, their volume reached USD 485 million, which is 2.5 times more than for the same period of 2011. However, the number of transactions remains practically unchanged. From this we can conclude that gradual change to the venture investment market structure favours mature companies. Significant growth in the total investment in the IT sector is driven by larger volumes of investment with higher investment rounds in later stages of projects rather than increased numbers of deals.
In terms of raised investments, e-commerce remains the unrivalled leader. The sector saw 21 deals raising approximately USD 315.7 million in investment. That is more than 6 times growth as compared to the comparable period of 2011 (14 deals totalling USD 48.9 million). In addition, we can see that investors are demonstrating a vivid interest in educational projects. Over the next 12 months, we are expecting that investors will focus on educational and healthy lifestyle technologies, mobile applications as well as B2B-related services and infrastructure technologies servicing such fast-growing sub-sectors as e-commerce and online tourism.
In the three quarters of 2012, 655 grants totalling over USD 133 million were provided for the development of IT, biotechnologies and industrial technologies.*
The biotechnologies and industrial technologies included in the report for the first time are still lagging behind the leader - namely, the IT sector - both in terms of deal numbers and investment amounts. Based on the results for three quarters of 2012, there were 14 deals (USD 2.6 million) in the industrial technologies sector and 13 deals (USD 7.0 million) in the biotechnologies sector. Accordingly, average deal value in the biotechnologies sector is higher than in the industrial technologies: USD 0.9 million versus USD 0.3 million correspondingly. Average deal value in the IT sector stands at USD 5.6 million, which also indicates that this sector is the most developed one.
For over 15 years, PwC has been issuing MoneyTreeТМ reports on leading tech markets such as the United States and Israel. For many global venture capital market players, these reports serve as the definitive source of information on current market conditions and recent trends. As the Russian venture capital investment market develops, new issues of MoneyTreeTM: Venture Capital Market Navigator will cover developments in the existing trends and the emergence of new trends in the IT sector, biotechnologies and industrial technologies, as well as other segments of the Russian innovation and technology market.* Grant-related data were not factored into the total venture capital market volume and assigned grants to non-market tools for financing innovative companies.