2023-04-19 19:35:19
The Ministry of Digital Development in the near future plans to present a set of measures to reduce the number of regulatory barriers to venture financing in the country, Minister Maksut Shadayev said at the annual meeting of the Association of Software Developers (ARPP) “Domestic Software”.
“The direction that we started to “roll out” from the beginning of the year is the availability, first of all, of external financing. Grants are, of course, good, but we all understand that there will not be enough for everyone,” the minister said. He added that grants are “a fairly targeted measure of support” for an IT company at a certain stage.
“Of course, we must form a full-fledged market for attracting external financing – venture capital,” the minister continued. He noted that in Russia there are a large number of regulatory barriers to the development of venture, without naming, however, specific obstacles. “But it is obvious that there is money in the economy,” Shadayev said.
“We are now, together with the industry, including the association (ARPP. – Vedomosti), are bringing together proposals on what barriers we need to remove in order to be able to attract [средства] in the development of IT companies, IT products at the development stages,” Shadayev said.
“Grants are good, but we understand with you that our economy will continue to go through difficult times in any case. And of course, we need to have market financial institutions, market players that will, in general, attract, invest in IT companies,” the minister concluded.
In the mechanisms of grant support for domestic IT projects, there may be more prospects than in venture financing, says Natalya Kasperskaya, president of the InfoWatch group of companies. She attributes the benefits of grants to the fact that they allow support for targeted projects that can help develop the IT industry as a whole. Whereas venture financing involves the purchase of a company as a whole or a block of shares in it, Kasperskaya emphasized in a conversation with Vedomosti.
Venture financing itself has been developing over the past years, but compared to the same American market, its size in Russia was relatively small, she continued. “Now, when, as the IIDF notes, the volume of venture capital funding has decreased tenfold, how could it have more opportunities?” – Kaspersky is surprised.
The domestic venture market is not in the best stage, director of the Internet Initiatives Development Fund (IIDF) Kirill Varlamov noted in his report at the meeting of the ARPP. “The Russian investment market last year fell about ten times compared to 2021. That is, in fact, it doesn’t exist, there are very few companies left that invest, most investors have stopped investing in Russia, they just froze in the hope of how this will all end” Varlamov noted. According to him, against the backdrop of the geopolitical situation, not only the Russian venture capital market, but also the global one, has shrunk. The expert estimated the reduction of the latter by two times.
“In 2022, the volume of venture investments in Russian startups reached a historic low over the past seven years. At the end of the year, only 137 transactions were recorded, in 2021 – 306. The volume of venture investments decreased by 68% to $ 819 million, ”Daria Zharkova, head of research at the Dsight platform for venture investments, told Vedomosti. The average deal size in the venture capital market decreased by 2.8 times to $3 million, while the median deal size in 2022 was $0.7 million, which is comparable to the level of 2021 ($0.8 million), she added.
“According to Dsight’s forecast, in 2023 the number of transactions may reach 130-150, and the volume of investments will be about $400 million (excluding large transactions and IPOs),” Zharkova said.
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