Total venture capital investments in 2013 came to
USD 653.1 million
MoneyTreeTM: Venture Capital Market Navigator is a new report published by PwC Centre for Technology and Innovation (CTI) and Russian Venture Company (RVC). The report looks at the venture capital investments in information technologies, biotechnology and industrial technologies in 2013 in Russia.
The report shows that the number of venture capital deals in 2013 exceeded the 2012 results by 18% (222 deals vs 188 deals in 2012), while the total investment decreased by 28% (USD 653.1 million in 2013 against USD 911.9 million in 2012) as a result of the average deal value dropping from USD 5.6 million to USD 3.1 million. At the same time, total venture capital deals on the Russian market, including grants, large deals worth over USD 100 million, investor exits, and investments in venture capital infrastructure, grew from USD 1.98 billion in 2012 to USD 2.89 billion in 2013.
As in 2012, the IT sector is leading in terms of investment funds raised. In 2013, it accounted for almost 87% of deals (193 deals) and 93.5% of total investments (USD 611 million). Thus, the IT sector's market share grew compared to the last year, when it accounted for 83% of deals and 87% of total investments, respectively. The number of IT deals increased by 23.7%, while total investment fell by 22.8% (against USD 792.1 million in 2012) since the average deal value decreased from USD 5.6 million to USD 3.3 million.
Total deals in the Russian venture capital ecosystem in 2013 reached
Based on the main trends in the development of Russia's venture capital sector in 2013, the following conclusions may be reached about this sector's maturation. Firstly, the professionalism of the players on this market is growing and, as a result, there is demand for quality in project implementation. Secondly, investors are cautious in their selection of companies and, since they are eager to mitigate risks, they are putting less money into projects at each financing stage. In order to secure investors, companies, even at their earliest stages of development, now need to have a tested business model and an experienced team, as well as a product that has proven itself on the market.
For over 15 years, PwC has been issuing venture capital market review MoneyTreeTM on leading high-tech markets such as the United States and Israel. For many global venture capital market players, this report serves as a barometer of current market conditions and recent trends.