Russian venture capital market in 2023
Venture business (from the English Venture – risky) is a risky investment activity associated with high risks. The risks are due to the fact that investors invest in undeveloped startups that may have great potential.
As a rule, investments in venture business are invested in many startups at once, most of which will not justify themselves, but losses will be covered by other successful projects.
In connection with the events of 2022, Russian venture investors faced the question of whether to continue investing in the Russian Federation or consider other jurisdictions as an alternative to the Russian market.
Many major participants have left the Russian market. As a result, the volume of investments and investment transactions decreased.
In 2021, the Russian venture capital market reached a historic high with a total investment of $2.4 billion. In 2022, the volume of investments has halved. Not only the number of transactions has decreased, but also their prices. According to data for the first half of 2022, out of 84 transactions, only 10 exceeded $10 million.
Despite this, many experts predict the recovery of the venture capital investment market in 2023. According to the head of the Ministry of Digital Development Shadaev, several large venture funds are expected to open this year.
The restoration of the venture capital market is also possible thanks to measures of state support for investors. For example, the state program “Skolkovo” provides for the reimbursement of investments in the form of tax deductions. A similar program was also launched for student startups.
The departure of foreign companies weakened competition and allowed many Russian entrepreneurs to launch their technological projects. Import-substituting technologies such as cybersecurity, data storage and processing systems, MedTech, companies creating new materials, and drones are developing.
Alternative investment tools
According to experts, the development of collective investments is expected. They, in turn, can develop due to crowdfunding platforms that have not worked in Russia for a long period due to the lack of full-fledged legal regulation of this area. However, the Rounds investment platform, developed by a resident of Skolkovo, has recently been launched. It provides for the possibility of participation in the capital of companies starting from 50 thousand rubles.
Another way to invest is to consider cryptocurrency. However, this investment instrument is subject to a high level of risks and volatility. Investors should transfer part of their capital from cryptocurrencies to traditional assets, where the risks will be lower.
It is expected that investments in technology companies will continue to grow, despite all the sanctions restrictions. Fintech startups have high growth chances. Instead of investing in new technologies, investments in gold and real estate, as well as in technological projects in the field of medicine and education, in the segments of the gaming industry, video platforms, social networks and messengers are still relevant.
After the departure of Western IT companies from Russia, it is expected that Russian companies will occupy their niche. Government support measures can have a positive impact on the development of the digital sphere.