During the first three quarters of 2013 the overall volume of venture investments came to
USD 551 million
According to a preliminary analysis of the Russian venture market in the latest edition of the MoneyTreeTM: Venture Market Navigator report, prepared jointly by the PwC Centre for Technology and Innovation (CTI) and Russian Venture Company (RVC), during the first three quarters of 2013 the overall volume of venture investments in Russia's biotechnology, industrial technology and information technology (IT) sectors came to USD 551 million. These investments resulted from 157 different deals (including transactions with no disclosed value). Compared to 9M 2012, the number of venture deals in the first three quarters of 2013 increased by 17% while the average deal size fell to USD 4.5 million (versus USD 6.6 million for the same period last year).
Similar to last year, the IT sector has remained our primary focus. Preliminary data show that during 9M 2013 the IT sector saw 138 venture deals, or 26% higher than during the same period last year, when 109 deals were closed. Moreover, the overall investment volume for 9M 2013 was USD 433 million (not including major deals), while the average deal value was USD 3.9 million. For comparison, during the same period last year the overall deal volume was USD 660 million with an average deal value in the range of USD 6.6 million.
Thus, we can say that the Russian venture capital market has demonstrated continuing expansion of investment activity despite a declining average deal value. This trend is attributable to one of the market's primary drivers, which we have identified as the appearance of new players who are focused on early-stage projects (first of all, the startup stage), for which a relatively small average deal volume is typical (i.e. USD 1.4 million at the startup stage during 9M 2013).
If we break things down by sub-sectors, the unquestioned leader among IT sub-sectors is the e-commerce segment, which accounts for the greatest number of deals (21) and the largest investment volume (USD 173 million). Social media takes second place by number of transactions (17), while tourism services and applications comes in second by investment volume (USD 56 million). As well, this year also saw rapid growth in such areas as IT solutions for educational services, financial sector technologies, mobile applications, games, and advertising technology.
The MoneyTreeTM: Venture Market Navigator report contains data provided by RVC, based on Venture Database and RusBase information, and subsequently aggregated by PwC.