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Global competition, technology, high request for the products high-tech economy, increase the attractiveness of investment in startups and innovative projects. Along with IT, developments in the field of artificial intelligence and the "Internet of things", corporations and foundations increasingly invest in biotechnology. Only for 2017 the growth of investment in European biotechnology companies was 29% (from 1.93 billion to 2.49 billion euros). While the dominant market for the biotechnology industry remain the United States, where a growing number of venture capital funds willing to invest in the markets for biotech.
The attraction of biotechnology for investors? First, it is the fastest growing segment of the "new economy" - about 10-12% per year. According to research company Grand View Research, during the next 7 years the global biotechnology market will grow almost in 2 times (from $400 billion in 2018 to $727,1 billion by 2025). Second, the company biotech industries demonstrate a higher return - for example, the net rate of return biotech venture companies is as high as 26.8% (for comparison, venture capital funds other industries show a yield of 21.8%). Third, businesses related to innovative biotechnological development and production, can in a short period to increase the shareholder returns of tens and even hundreds of times. The General index of biotechnological production grows in 2010. The largest and one of the most attractive ETFs in the biotechnology sector is the iShares Nasdaq Biotechnology ETF (IBB), which owns shares in more than 190 biotechnology and pharmaceutical companies. Over 5 years shares of the iShares Nasdaq Biotechnology ETF (IBB) rose by 75%.
But most importantly, is the impact of developments in the field of biotechnologies on the quality of life. An increasing number of countries seeking to enter the "club 80+" on life expectancy. Today in this club, lead Hong Kong - life expectancy 83,73 year, Japan - 83,3 years, Italy - 82,84 of the year, Switzerland - 82,66 year and the Singapore – 82,64. Increasing the average age and, as a consequence, the demand for the latest developments in the field of biotechnology drugs, vaccines, materials, devices. Today about 90% of all biotechnological products in the world refers to medicine and health care is the development of new drugs and vaccines, molecular diagnostics, cell technologies, editing of the human genome, grown tissue and even entire organs, the introduction of biopolymers that are compatible with the cells of the body.
The biggest market of the life science and pharmaceuticals in the USA. This creates half of the world total bioproducts for health. High performers are European countries. The new "growth point" biotechnological development in recent years is China. According to the investment Bank's Chanson & Co, the Chinese are concerned about the health and population determines the enormous capacity of the market goods in the health sector. Biotechnology is defined by the government of China as one of the 7 key direction? the development of the country, and the government annually invested around $40 USD in biotechnology, which allowed attracting over $10 billion of venture capital investment? in the industry only in recent years.
The industry of biotechnology products in Russia is still in its infancy. The global market share - less than one percent. A kind of stop-factor is the complexity of bringing products to market and long development cycle from a testing phase to launch commercial product. But today, biotechnology is defined as the key direction of innovative development of the economy along with IT and nanotechnology. According to the "Comprehensive program of biotechnology development in Russian Federation for the period till 2020" the share of imports in the consumption of biodegradable should be reduced by 50% and exports to increase in 25 times. The production volume is expected to grow by 33.
To address these challenges in 2013, the government adopted a series of measures to stimulate demand for the products and increase the competitiveness of biocompany (public procurement, grants, establishment of new standards and technical regulations), to develop education and scientific research programme to create regional clusters of development.
Some progress in the settlement of the Russian market of biotechnology have increased the interest of investors, including increased investments in venture projects at different stages. In 2016, the healthcare industry was third on the venture investment market with a $12 million after IT with $14 million and the telecommunication industry with $83 million Deal for metproduktsii, according to the FRII was made of 1.6 billion rubles, which indicates a high financial activity. Experts attribute this to the increased confidence in the biotech funds with big capital.
"Earlier most of the investments in biotech businesses in our country were in the seed stage of formation of the companies. Here lower the entry threshold to $1 million Today we are witnessing the opposite trend, investors seek to enter the stage of growth and expansion. This suggests that the venture capital market gradually began to shift to large parties, and the strategy of entry and exit investment today more thought out than five years ago," said trend chief analyst of the group Investpoint Alexander Weber.
However, many successful projects need significant investments at an early stage. A good start gives you the possibility of entering new markets. Example – SKOLKOVO "Actually". This is a project for the first Russian medical exoskeleton to help people with disabilities. The device allows you to restore limb movement after a stroke and injuries.
At the beginning of the project Moscow Seed Fund and Biofond RVC invested in the company "Actually" 16 million rubles. Funds went to the completion of the first commercial version of the exoskeleton and its withdrawal on the Russian market. Began mass production, then followed by a large contract with the Government of Moscow and the supply devices in a Metropolitan hospital. Today, the Russian product is in demand in the Asian market. Korean investors are investing in its promotion, including in China and Japan. Explanation: this is a good production, not inferior to foreign analogues, but cheaper 3 times.
To domestic developers in the field of biotech and healthcare today highlighted players and foreign venture capital markets. For example, last year first and largest Russian investment venture Fund RBV Capital was investing in another SKOLKOVO resident - AGCT. Investments in 44 million roubles will be allocated to the development of innovative technologies for genome editing to treat HIV.
Rapid advances in biotechnology have shown the company 3D Bioprinting Solutions. The company uses technology of three-dimensional bioprinting, creating organs from stem cells of the patient. Is a branch of bioengineering which in the future will allow you to replace damaged or old organs. In 2014, the team created the first Russian bio-printer, a year printed copy of the thyroid gland of the mouse, and in 2016, the company signed an agreement with the United rocket and space Corporation on the delivery of the bio-printer to the ISS.
Another Russian startup "Biomicrogels" it was noted that there was a selection in the TOP 100 out of thousands of applications for participation in the British MassChallenge acceleration program in 2016. "Becomingly" is also a resident of the SKOLKOVO Foundation and a graduate of the accelerator GenerationS.
A lot now depends on an expert assessment of startups, given their narrow focus, the analyst Investpoint. For the further development of the Russian biotechnology market greater role is played by the presence and expansion of the industry of venture capital funds and investor companies with a focus on biomedical topic. A special role in this process is devoted to the examination of the inside state development institutions – VNESHECONOMBANK, RUSNANO, RVC, SKOLKOVO.
"On the horizon of next 5 years in the market of medical products are likely to expect a certain decline in applications for smartphones and other small developments. They do not justify the expectations imposed several years ago. However, we can expect increased investment in the segment of more serious medical technological development, which undoubtedly will demonstrate sustainable growth, - the analyst Alexander Weber. – It is likely that biotechnology will be able to overtake on the attractiveness of the it industry, which is now a kind of "benchmark" for investors.
Skolkovo Ventures will receive RUB 300 million from the Railways
After the United aircraft Corporation and "Helicopters of Russia" investor of the Skolkovo Fund industrial Ventures will be the Railways. The state monopoly is ready to invest 300 million rubles, hoping to apply in its activities of technology start-UPS in the field of video Analytics and augmented reality.
The CEO of "SKOLKOVO venture investments" Vasily Belov. Photo: Sk.ru
Russian Railways and Ventures Skolkovo signed an agreement involving investment of state monopoly in the venture capital Fund, told "Kommersant" Deputy Director General of Russian Railways Andrey Starkov and CEO of "SKOLKOVO Venture investments" Vasily Belov. The amount of Deposit of OAO RZD in Skolkovo Ventures will amount to RUB 300 million According to Vasily Belov, are already pre-approved investments in two companies, the development of which is applicable for implementation in the railway monopoly. "One project deals with videoanalitiki and control production processes, another company on the basis of the technology of augmented reality allows for remotely commissioning of complex equipment," he said.
State-owned companies are already cooperating with Skolkovo Ventures. In October 2017 the United aircraft Corporation has announced plans to invest in the Fund up to RUB 300 million may 31 SKOLKOVO agreed investments worth 300 million rubles. "Russian Helicopters". Anchor investor is the Russian venture company (RVC), which will provide 1.5 billion rubles, and the target Fund size is 2.5–3 billion rubles.
The priority areas for the Skolkovo Ventures — robotics, additive technology and new materials, unmanned technology, smart energy, and predictive Analytics to industrial Internet of things, said the representative of "SKOLKOVO". In each project Skolkovo Ventures will invest 100-200 million rubles., thus, it is planned to invest in about 15 companies. "We have, in fact, a unique position on the market because it provides such broad access technology implementation of high-tech startups, of which there is none. All participants provide opportunities for running, implementing and scaling solutions to portfolio companies through its business," a satisfied Mr. Belov.
In fact, Skolkovo Ventures brings together corporate investors, not competing, says investment Director Maxfield Capital Alexey Toknow. This model works accelerator Startupbootcamp partner is a subsidiary of Swiss Federal Railways SBB Cargo, he said. There are other examples: at the SPIEF-2018 RUSNANO, RVC and the Fund of development of the Far East and the Baikal region signed an agreement on the formation of the far Eastern Foundation for the development and implementation of high technology with a volume of 5 billion rubles., there is also a joint Fund Sistema and RUSNANO Rusnano Sistema, adds shareholder Run Capital Andrey Romanenko. The funds, created several corporations, their primary goal is to see the development of the industry as a whole and not pursue corporate objectives, and this model is still not very common, said Mr. Romanenko.
One of the key events of the twentieth annual conference of small and medium enterprises of the Arkhangelsk region will become a round table on "Tools to support entrepreneurs and investors in municipalities".
The organizers of the site, which will take place in NARFU them. M. V. Lomonosov was made by the development Corporation of the Arkhangelsk region and the regional Ministry of economic development.
According to the organizers of the round table, it is very important that businessmen and potential investors know all the necessary information about the existing range of government measures to support business and investment projects.
During the event, will be presented to existing tools to support enterprises at Federal and regional levels, their requirements for growth and business development, expanding activities, and the implementation of investment projects and programmes.
The first Deputy of the General Director of Corporation of development of the Arkhangelsk region Olga Gorelova said:
"At the round table of regional companies will share their experience of developing and implementing business development projects with involvement of resources of Federal and regional support institutions. A separate unit will be devoted to dialogue with business representatives on the selection of specific financing instruments and other possible support measures".
In addition, the roundtable will discuss the implementation of municipal investment standard as a quality system to work with entrepreneurs and investors.
To participation in action are invited heads of industrial enterprises, representatives of SMEs, companies implementing or planning to implement investment projects on the territory of the region, heads of municipal formations of the region, active members of the Council on entrepreneurship in the municipalities and representatives of the Executive authorities of the Arkhangelsk region.
Registration for the event is at the link.
Participation in the round table you can contact leading specialist of the Department for cooperation with the municipalities of JSC "Crimean astrophysical OBSERVATORY" of Valeria Kurdyumova, phone: +7 952 252-84-35, email: email@example.com.
Recall, the twentieth conference of SMEs in the Arkhangelsk region will take place on 13 and 14 June 2018. The program of events and registration form for the conference is available on the event website.
Press-service of JSC "Corporation of development of the Arkhangelsk region"
The blockchain technology is gaining popularity in various industries from logistics to banking business – by automating processes and problem-solving with the confidence that it brings.
Foreign investors prefer to invest in projects with long payback periods
The inflow of direct foreign investments in Russian agriculture at the end of 2017 will be reduced. This view was expressed by the CEO of the Institute for agricultural market studies (IKAR) Dmitry Rylko. "Official statistics on investments in our agribusiness from abroad over the past year will be published in September 2018, but is likely to do verhneuralskogo for the industry it will not show. We will continue to watch the decline of foreign investments", — he stated, adding that "no tragedy here."
The experience of developed countries shows that foreign investments in agriculture of a particular region never play a key role. First important inflow of domestic investments into the sector, which generated by farmers themselves, banks, etc. Although the situation in the food industry can be very different. So, even in Russia in some years the share of foreign investment reached several tens of percent. According to the Central Bank, three quarter of 2017, the influx of investment in domestic agriculture (including forestry, hunting and fisheries) in comparison with the figure for the same period in 2016 and decreased by $95 million to $235 million.
According to the head of the Center for economic forecasting of Gazprombank Darya Snitko, Russian agriculture still remains attractive for foreign investors. This is confirmed by the fact that they not only leave Russia, but to actively come into the country with new projects, as it is today "the best time from the point of view of the economy." Although geopolitical risks are very significantly constrain this process. "Nevertheless, actively strengthen the positions in Russia, such "strategy" as Louis Dreyfus, Cargill, CP Food, "Agroterra" (NCH Capital), multinational companies — food industry, which are included in the projects of processing agricultural raw materials (Nestle, Danone, etc.), she said "the Agroinvestor". — There are smaller but interesting examples of foreign investment recently: Savencia Fromage & bought Belebeevsky Dairy cheese factory in Bashkiria and one of the largest agrotrader ADM acquired a Russian asset on processing of grain".
However, examples of the withdrawal of foreign players from the Russian market known, reminds the partner of the company "A8 Practice" by Andrey Tikhomirov. This is the Swedish Black Earth Farming (BEF), Volga Farming, Trigon Agri a / s Finnish. Recently on the sale of two farms in the far East announced that Hyundai Heavy Industries. "As an example, you can also allow the Ukrainian agricultural holding Kernel, which owned three oil extraction plants in the Stavropol region, as well as a 50% stake in Taman grain terminal jointly with Glencore. The company sold all the assets", — said the expert. Gone from our market and other Ukrainian investor — "Myronivsky Hliboproduct". Holding exchanged its Russian subsidiary "Voronezhagro" assets "of Agriculture" in the Western Ukraine.
The main mistake which departed from the country companies that they broadcast its local business model to the Russian market without modification or adjustments, said Tikhomirov. "Also, we should note that the BEF initially chose the wrong strategy associated with growth in land prices almost without developing high-quality operations, and that suffered great losses," he adds.
In the short term Tikhomirov does not see any obvious candidates among foreign investors, which may leave the Russian market or discuss this decision.
A growing trend
Daria Snitko sure that foreign investment in the Russian agrohotel will grow. The reasons for this — high competitiveness of domestic production of grain, oilseeds, milk, pork, poultry, in the future of beef production. Moreover, it is already profitable and attractive sector can increase the efficiency of using of foreign experience and technologies. "And then the investments from abroad will we need", — the expert believes. In markets where the substitution took place (e.g. poultry and pig farming, sugar) rate of growth of revenues and profit has slowed significantly and organic growth will slow down. This put to the owners the task of expanding the business faster than the market, which can be realized through M&A, partnerships with foreign companies expand into foreign markets, says Snitko.
The industry has already come to new foreign investors of new Russian regions, said Tikhomirov. This increases the quality and volume of investments in APK. "Also we should not forget about the foreign investment funds that provide long-term investment in the Russian agro-companies, but do not advertise it publicly", — he draws attention. Taking into account the latest trends highest expectations cause Asian investors, who are increasingly present, the flow of money from the Asian region will grow, the expert believes.
In addition to the geopolitical situation, the massive arrival of foreign investment restrains the overall alertness of capital in emerging markets (including Brazil, Turkey, Argentina), adds Snitko. With respect to risks, among the most problematic for foreign investors of areas it allocates crop production, because land ownership by foreign companies is limited. On the contrary — foreigners is simpler than most of the Russian players to develop in the sub-sectors with long payback periods. "As a rule, investing in projects in Russia, to Finance the foreign players attracted loans of the parent company, which is a relatively cheap source of funds, and assumes a higher repayment period," she explains.
Tikhomirov identifies two main factors that hinder the inflow of foreign investment in the agricultural sector is the unclear situation with Western sanctions and Russian counter-sanctions, and the absence of a clear and transparent long-term state policy of support of investment projects in agriculture. "The investor must understand the rules of the game in the long term for project evaluation and decision about entering the market," he says. According to experts, for foreign investors the most effective model of investment, where the project has a strong Russian partner, which already has a certain resource. It can be modern production assets, strong brands and "shelf space", client portfolio, serious land Bank or GR resources.
A foreign investor can bring new technologies, money or the possibility of entering the foreign markets. In this case, both parties get a synergy effect: foreign reduces the risks of entering a new market, while the Russian receives significant resources for rapid growth.
According to the Central Bank, over the past eight years, most investment from abroad in domestic agriculture received in 2013. Then this amount was $934 million However, in 2014 the inflow of foreign investment fell by more than 1.5 times to $598 million In 2015 with a slight increase (almost 13%), and in 2016 the volume of investments dropped again to $446 million
The portal allows to simplify the interaction of investors with the authorities at all stages of the project
The online resource provides complete and current information on legislative base in the sphere of investment activities, support measures and investment opportunities in the region. Thanks to him, potential investors will be able to study the business climate and to get acquainted with the conditions of development and doing business in the region.
The portal allows to simplify the interaction of investors with the authorities at all stages of the project.
Users online function is available to filing applications for support of investment project. The proposal is sent to the Corporation for the development of the Arkhangelsk region, performing the function of "single window" for further maintenance of the project.
Investportal is also a feedback mechanism investor with the regional government. This allows you to quickly solve the issues arising in the implementation of investment activities. This portal contains all the channels of communication with the leadership of the region.
In addition, any entrepreneur can become a member of the Commission on investment policy and competition development in the Arkhangelsk region, having ordered a pass for the portal.
Further development of the portal will go towards the improvement of functionality and expansion of useful investor information, including submission of new proposals on the investment map of the region. Go to the online resource you the link.
The press service of the Governor and the Government of the Arkhangelsk region
How to find and select good companies for investments how to appreciate them, something to think about before investment, what to ask and what to read investor
The company "SKOLKOVO Venture investments" took first place in the nomination "the Best consultant on the market for VC" version of Russia VC Awards.
The founders award is an information-analytical portal PREQVECA (part of Cbonds group).
General Director of "SKOLKOVO Venture
investments" Vasily Belov. Photo: Sk.ru
The competition jury making a decision, noted that the company is the most active player in the investment advice technology companies. In particular, over the past year, nine start-UPS have attracted investments with the assistance of the "SKOLKOVO Venture investments".
"We are pretty young company, but already occupy a leading position in the market, said Sk.ru General Director of "SKOLKOVO Venture investments" Vasily Belov. From April 2016, we attracted more than 2.7 billion rubles in start-UPS in the form of investment. About 20% of the total venture capital market accounts for transactions of the company."
Just running "SKOLKOVO Venture investments" three funds focused on work in the industrial sector, IT and technology in the agricultural sector. The size of each Fund — from 2.2 to 3 billion rubles.
Sverdlovsk venture Fund for the first time held an open meeting of the investment Committee in the format of meetings of investors and projects. The objective of these measures is to give broad expert evaluation of the submitted ideas and determine which projects can be modified to the venture investment Fund and private investors.
The development of high-tech enterprises is one of the priorities for economic policy in Sverdlovsk region. Governor Yevgeny Kuyvashev has repeatedly stressed the need to develop supporting innovation and integrating them into the business.
Just at the first meeting of the investment Committee were considered 8 projects. Experts were made by the representatives of development institutions (the Sverdlovsk regional entrepreneurship support Fund, Technopark "University" Foundation "AGATE"), private investors, portfolio companies of venture capital Fund representatives "Support of Russia". After the defense all participants received feedback from each expert, which will allow to Refine the weaknesses and to build the vectors in the following steps.
"After the investment Committee staff of the venture capital Fund will hold bilateral meetings with each participant and based on the comments of experts will help them create a road map for further development. Not all projects require venture capital investment, many need proper packaging, partnering with a large enterprise or just borrowed Bank resources. But even if we understand that the project is not the profile of a venture Fund, we will still try to help the authors. For example, one of the projects already agreed to meet with the regional support Fund for the discussion of preferential investment crediting", - commented the Director of the Sverdlovsk venture Fund Denis Buffoons.
At the meeting of the investment Committee were presented projects from different fields: IT, education, industry, aviation, medicine. After the presentations, the experts chose the three most interesting projects, they are: the production of elastic titanium implants, manufacture of air handling units "Aerolizer" controlling the quality of indoor air, and manufacturing of unmanned aircraft systems with a wide range of applications.
It is expected that these investment committees will be held regularly - once in two months. The authors of the projects can contact the Sverdlovsk venture Fund. All information and contacts are available on the website www.sofp.ru in the section "Attracting investment".
We will remind, the Sverdlovsk venture Fund was established in 2006 with the participation of the Ministry of economic development of the Russian Federation and the government of the Sverdlovsk region according to the model of public-private partnerships. In 2014, the venture Fund started to implement a new investment program. Total assets of the Fund at the end of last year – 227,9 million rubles, the maximum investment in a single project – 23,4 million roubles, prerequisite: co-investment at least 50% of the amount of the Fund's investments. For 2017, the Foundation provided financial support to 4 projects totaling $ 141,1 million rubles.
Venture financing is a long — term (3 to 7 years) and high risk investments. Most such start-UPS focused on innovation, allowing companies to quickly develop and justify investments.
Steady growth in investment activity, which was pointed out in the Central Bank and economy Ministry, in March stopped, according to new estimates of the index of CMASF, analyzing the dynamics of the supply of investment goods in February 2018. The reason for the inhibition — weakening demand for construction materials. Although analysts of the centre believe inhibition of investitionale temporary, fundamental factors for a sustainable investment growth is still not appeared.
After Rosstat has fixed decrease in volume of construction works by 0.2% against growth of volumes of housing construction, 33.8% yoy in February 2018, says found new evidence of inhibition of investitionale. The index of the center characterizing the dynamics of the supply of investment goods in February remained at the level of January due to lower supply and net imports of building materials (construction accounts for more than half of all investments in the Russian Federation) with the continued increase of imports and production of machinery and equipment (see chart).
In the March report on monetary policy, analysts of the Central Bank noted the "steady growth of investment activity in December 2017 — February 2018", which is contrary to the Rosstat data on the construction and estimation of the CMASF. The Central Bank thus recognized that "increasing consumer and investment demand largely satisfied by increasing imports at a faster pace". Yesterday Rosstat published a fresh quarterly estimate of GDP in 2017 (see "Today's date") shows that fixed capital formation grew at an annualized pace of 3.1% in the first 7% second, 4% in the third and 3.4% in the fourth quarter, suggesting a steady growth of all capex 2017. In the baseline scenario, the Central Bank expects that in 2018, the investment growth rate will reach 3.5–4% and will start to slow down in 2019, if the government won't do their structural support.
Analysts CMASF note that "there is every reason to expect short-term nature of the interruption" in February — in their opinion, most likely related to the weather. "Returning to normal at the end of January weather in the European part of Russia led to the inhibition of speeding earlier volume of construction works",— they explain. Note that surveys of Industrialists IEP name of Yegor Gaidar, in contrast, recorded a marked improvement investplan companies in February (see "Kommersant" on March 26). But in March, the index fell by 3 points, staying in the black: December—February, the willingness of companies to invest has increased by 16 points. Against the background of deteriorating demand in March of the current volume of investment has been satisfied 63% (best result since 2011). According to estimates of economists HSE, restoring capex propensity to invest in 2017 declined amid falling profits as their primary source (see "Kommersant" on 13 and 27 March). In January 2018, typical for this month the surge in the net financial result of the companies was weak — 24% in annual terms (2.2% a year earlier).
The quality of investments remains low: according to the HSE, 29% in 2017 procured imported equipment used, and more than 50% in the assessment of the impact of investment on competitiveness noted a lack of changes regarding 2016, almost 45% do not expect changes in 2018. According to the survey of Rosstat in March 2018, 41% of companies in processing and 32% in the production of considered depreciation of equipment the main obstacle to increase in output. Economic uncertainty and limited edition 42% and 32%, insufficient domestic demand — 52% and 28% respectively. Given that, according to HSE estimates, investments in Russia are a derivative of economic growth and not Vice versa, fundamental factors for a sustainable increase in capex still has not appeared.
The newspaper "Kommersant" №56 from 03.04.2018
The total capitalization of venture capital funds rose by 8% and reached 4 billion U.S. dollars
Russian venture capital Association (RVCA) in partnership with the Venture investment Fund (VIF) has prepared a study of the Russian market of direct and venture investments for 2017. The study is conducted annually with the support of RVC. According to the results, for the first time in 2013 in Russia was marked by positive dynamics of the total capitalization of venture capital funds: the increase is around 8% or 290 million U.S. dollars.
Capital market: a positive vector
In 2017, the Russian venture capital market for the first time in 2013 showed a positive trend. Cumulative number of venture capital funds grew by 10% (before that, the largest growth was demonstrated in 2014 – 6%) and amounted to 194 of the Fund. This is not to say that the positive dynamics is due only to the increase in the number of new funds on the market – this figure has remained relatively stable over the past four years and ranges from 22 to 28. It is more about the completion of substantial outflows of existing funds from the market. If annually, starting in 2013, eliminated an average of 17 funds, while in 2017 this figure was only 5 funds.
Positive dynamics is observed in the amount of capital funds. After continuing in 2013, falling market for the first time demonstrated the growth: at the end of 2017, the aggregate amount of capital operating in the market of venture capital funds increased by 8% and reached 4 billion U.S. dollars.
It should be noted the continuing active position of the state, which in 2017 accounted for nearly a third of the amount of capital of the market and just over 20% of the total number of venture capital funds. A similar proportion holds in the statistics of new venture capital funds – of the 22 players the newcomers to the state can be attributed to the 4 foundations (18%).
While venture capital funds with state participation remain the dominant source of venture capital investment for startups outside the sector of information and communication technologies: 89% of them are focused on investments in the real sector of the economy or the industry have mixed preferences.
Investment transactions: the balance point
After 2013 the outflow of capital and review by the funds ' investment strategies have significantly reshaped the landscape of the venture capital market. The caution of investors has been reflected in the revision stage preference towards more Mature stages, and the "average bill": if in 2012 and 2013, the average volume of investment was 2.7 and 1.5 million dollars respectively, starting from 2014, it stabilized and fluctuates at the level of 0,6-0,8 million dollars.
A characteristic indicator is the investors search for new growth points. In 2017, the sector of information and communication technologies, while remaining traditionally the leader of the industry preferences of investors, still much lost ground: its share in the total volume of investments decreased by 21% compared to the previous year and amounted to 58%. On second place came the industrial technology sector – it accounted for 22% of the total investment. Investments in biotechnology amounted to 7% of the total investment.
Only in 2017, has invested 125 million USD in 178 companies, which is quite comparable to 2016 (125 million U.S. dollars and 204 of the company, respectively).
"Upheavals of the first post-crisis years gave way to a confident stabilization indicators that gives market participants a reason for an optimistic view on its future. At the same time, risk factors may be the relative unavailability of foreign capital, and redirect the geographical focus of a number of Russian funds to foreign markets in search of new industry growth points: blockchain, virtual reality, etc.," said the Executive Director of RVCA Albina Nikkonen.
"After three years of recession, the venture capital market has found a point of balance for the first time since 2013, stopped the decline in capital venture funds. However, in absolute scale venture capital industry in Russia is still quite compact. For the transition to a new stage of development have to solve a number of problems, one of which is the increased supply of venture capital, including at the expense of big business, business angels, private pension funds. Given the now created incentive for industry we expect the positive dynamics to 2018," commented the General Director of RVC Alexander Povalko.
Full version of study available at the link.
About the "market. Direct and venture investment"
The review of the market of direct and venture investments, published annually by the Russian Association of venture investment (RAVI) in 2004, to date, is characterized by the most complete and authoritative statistics on the Russian market. To prepare experts RAVI and VIF is annually held large-scale research of the market of direct and venture investments, which included a survey of leading investment structures, working in this field.
RVCA (Russian venture capital Association) - a professional Association of representatives of venture funds and private equity funds. The RVCA activities are aimed at formation and development of the Russian market of direct and venture investments and the establishment of necessary conditions for its development.
VIF non-commercial organization with state participation, which is created for development of competitive technological potential of Russia. The main objective of VIF is the formation of organizational structure of system of venture investment in accordance with the approved by the Government Commission on science and innovation policy the main directions of development of extrabudgetary funding high-risk projects (the system of venture investment) and the organization of attracting investments (including foreign) in high-risk high-tech innovative projects.
JSC RVC — the state Fund of funds, Institute of development of venture industry in the Russian Federation. The main objectives of activities of JSC "RVC": to stimulate the creation in Russia own industry of venture investment and the performance of the functions of the Project office of the National technology initiative (NTI). The authorized capital of JSC "RVC" is more than 30 billion rubles, 100% of the capital belongs to the RVC Russian Federation represented by the Federal Agency for state property management of the Russian Federation (Rosimushchestvo). The total number of funds created by JSC "RVC", reached 26, their total size — 35.5 billion rubles, the Share of JSC "RVC" — 22.6 billion RUB Number of approved investment funds RVC innovative companies has reached 218. The total volume of approved investment funds — 17.9 billion rubles
Private capital investments in Russia are a derivative of GDP growth and companies ' financial performance, without identifying them, made the analysts of the development center of the Higher school of Economics (HSE). They suggest future government to focus on finding factors that can accelerate the growth of the "here and now", primarily by increasing non-oil exports. However, the success of this task depends more and more on external rather than internal conditions.
In the message to the Federal Assembly in March 2018, the President set the government and the Central Bank the task by 2025 to increase the share of investment in GDP from 21% today to 25%. According to the orders of Vladimir Putin, economic growth in the future should be higher than the average. And although the current medium-term projections assume 2% growth, the target acceleration to 3.8% (which is 0.3% higher than the average dynamics) will require average annual growth of capital investments in 6% against 4.2% in 2017, estimated the analysts of the Center for development of HSE's new report, "Comments on the state and business".
The task of accelerating economic growth in relation to investment objectives the primary turned out to be not only theoretically to the report. Sectoral analysis of investment activity shows that it is closely tied to current output growth.
"Regression analysis shows that the growth of investment in our environment is expected, a process dependent on self-financed investment (of corporate profits) and price stability, and that has been an unexpected, a process that may be rather a consequence and not a prerequisite for economic growth," the authors conclude. Despite some recovery in lending to companies, the mechanism of transformation of savings into investments in the banking sector is still not functioning and the propensity of companies to invest out of profits, which continues to shrink in most industries was very high (see graph).
Key contributor to the rapid acceleration of GDP growth, experts say that the increase in exports and investments are the major factor preventing its inhibition. Thus, in the development Center offered the future government to focus on addressing factors that hinder export growth.
In the message Vladimir Putin spoke about the need for six years to double the volume of non-oil non-oil exports to $250 billion, including increasing the export of machinery and equipment. HSE noted that while there is not even a definition of non-commodity non-energy exports. However, the main obstacle to its rapid growth can be even weak domestic demand and under-investment that "reduces the probability of recurrence times the growth of machinery exports in the coming six-year-old", the most significant risks are a further tightening of Western sanctions, rising trade protectionism and, possibly, a sharp slowdown in global growth.
The newspaper "Kommersant" №51 from 27.03.2018
Company PJ Western, the master franchisee of American restaurant chain Papa John's International in Russia, CIS and Central Europe, announces the conclusion of a transaction with an investment FundBaring Vostok. Through this collaboration, the network plans to increase the number of restaurants up to 450 points by December 2020.
PJ and Western direct investment Fund Baring Vostok signed an agreement on investment, which will go to further development of a network of pizzerias in Russia, CIS and Central Europe. The proportion of shares of new investors made 37%. In addition to Baring Vostok funds the company received from Global Restaurant Management who will retain shares in the amount of 50.1%. The investment from Baring Vostok followed by investment from Global Restaurant Management (GRM), including investments of the hockey player Alexander Ovechkin. The company announced in February 2018.
The structure of shareholders of PJ Western have been other changes. CapMan Russia Fund has sold some shares, while maintaining the position of the minority shareholder. Recall that CapMan invested into a Papa John's in 2009.
"We are very happy that Baring Vostok has become one of the major shareholders of "Papa Jones". From this Fund an outstanding track record of talented entrepreneurs and world-class companies in Russia, which it supports", says Petri Savolainen, partner at CapMan Russia.
"We continue to see tremendous opportunities for growth of the network in Russia. In the next three years PJ Western invests approximately $ 50 million in the development of the "Papa Jones". The network continues to expand its presence in Russia and the CIS, we also analyze market opportunities in Central Europe. We plan to open 450 restaurants by the end of 2020," - said Christopher Quinn, President of the Western PJ.
"Papa John" - a leading consumer brand, a leader in the competitive market. We share the views of the company's management on the prospects of its development - the systematic expansion of the activities of "Papa John" in Moscow and abroad, which will contribute to international awareness of the brand and the experience of Mr. Wynn. We look forward to working with Christopher and his team," - commented Ekaterina Lukyanova, partner of Baring Vostok.
For 2017 the number of restaurants, "Papa John" grew by 45 pizzerias and reached 146 at the end of December. According to Euromonitor International, the total revenue of the network in 2017 reached 4.5 billion rubles, or about $ 80 million.
About the company:
Papa John's in Russia
Chain "Papa John" presented by PJ Western, which is the master franchisee in Russia, CIS and Central Europe. By March 2018 151 opened restaurant, 87 of them in the ownership of the network in Russia, 51 – running franchise in Irkutsk, Krasnoyarsk, Angarsk, Kemerovo, Tomsk, Tyumen, Krasnodar, Tver, Vladimir, Novosibirsk, Kazan, Samara, Tolyatti, Sochi, Yekaterinburg, Obninsk. On the territory of Belarus open 10 pizza franchise. In December 2017, opened the first private restaurant chain in Warsaw. 4 March 2018 started a second restaurant in Bishkek.
Christopher Wynn was born in USA, moved to Moscow in 2002 to become an entrepreneur in Russia. PJ Western acquired the master franchisee of Papa John's. In 2008, the company had four restaurants. By 2018, the company PJ Western became one of the largest franchise businesses Papa John's in the world. The first restaurant "Papa John" in Russia, opened in December 2003. At the beginning of 2018, the company employs more than 2000 employees, the company also owns its own fleet of vehicles for delivery. "Papa Jones" one of the top three market leaders in pizza delivery in Russia. 75% of orders received online — the highest indicator among all 45 countries of presence.
In 2017, the Russian team "Papa John's" won in the category "Best international franchise" (Best large international franchisee) at the annual prize OPCON 2017 in the United States. The idea to create the award among its franchisees appeared first on John Shatter in 2010. During the year representatives of Papa John's International observe the performance of all franchisees, the key of which are: revenue growth comparable restaurants, the number of open restaurants and the quality of the product according to the "mystery Buyer". This is the premium company for the title of best franchisee network among the major offices.
Papa John's International
The staff-apartment: Kentucky, Papa John's International, Inc. (NASDAQ: PZZA)
Papa John's is the third largest company in pizza delivery in the world. Chairman and company founder "Papa" John Snater founded the company 33 years ago. Today Papa John's — more than 5,000 restaurants in 45 countries, including England, Canada, India, China, Venezuela, Egypt, Saudi Arabia, France, Spain, the Netherlands and Turkey.
About Papa John's
According to the authoritative American customer satisfaction index (ACSI) restaurants Papa John's 15 times ranked first in customer satisfaction among all national pizza restaurant chains over the past 17 years. Papa John's is the official sponsor of the National Football League, the official pizza of major League Basketball, as well as the official partner of the NHRA. More detailed information can be found on the websitehttps://www.papajohns.com.
About Baring Vostok
Baring Vostok is one of the leading companies of direct investment operating in Russia and CIS countries. Since 1994 funds of Baring Vostok invested more than $2.8 billion in 80 projects, including a number of successful companies in the financial services industry and the oil and gas industry, telecommunications and media, in the consumer sector. Currently, the capital funds is $3.7 billion In the number of projects funds: CTC Media, Golden Telecom, Yandex, Ozon, gallery Groups, CFT, Enforta, ER-Telecom, 1C, Burren energy, Volga Gas, Zhaikmunai, Novomet, Kaspi Bank, Eastern Bank, Europlan, EMC and many others. Investment Advisor of the funds is a company Baring Vostok capital partners group limited (Guernsey), the Moscow office which has a team of forty investment professionals. The brand combines Baring private equity funds with capital exceeding $19 billion Baring Private Equity International is one of the largest global networks in the private equity market in CIS countries, Asia, India, Europe and Latin America.
CapMan is a leading Scandinavian company, which manages assets on the market of direct and alternative investments, with an effective approach to the creation of added value in portfolio companies and assets. We offer a wide range of investment products and services. As a founding member of the Nordic private equity market over the last 28 years we have helped hundreds of companies and properties to achieve significant growth and greatly increase its value. Today, the company operates 118 Chapman professionals in the field of private equity managers total assets of 2.8 billion euros. We not only manage assets of our clients and investors, but also investing with the company's balance sheet. Our main goal is to ensure high returns and innovative solutions to our investors. In the structure of the company Chapman includes the followingfunds: Real Estate, Buyout, CapMan Russia, Credit Fund, Growth Equity, Infrastructure.
Contact person for media:
Press office "Papa John" in Russia
+7 (917) 557-49-49
In the next two months will launch a number of projects under construction of the agroindustrial complex of the region. Among them – a dairy farm in Kolomna, equipped with robotic equipment of world level. The new complex of greenhouses will be opened in Noginsk, another farm in the Pushkin municipal district.
In 2018, a nearly 4.5 times increase in the volume of preferential crediting of farmers: currently has provided loans at a concessional rate of 5% for a total amount of 840 million rubles (last year – only 189 million rubles). Already issued more than 350 million rubles as subsidies to agricultural producers of the Moscow region, including the farmers, to compensate farmers in conducting spring field works.