According to the Company’s new strategy approved in 2017, RVC’s mission is to shape a mature venture capital market through the consolidation and development of resources, competencies and initiatives on the part of investors, investment portfolio managers and entrepreneurs so as to develop and promote innovative products and technologies in priority technology areas that support Russia’s leading position in the global technology market.

RESULTS OF RVC INVESTMENT ACTIVITY IN 2017

RVC’s investment activity is aimed at expanding the venture capital market by setting up of new funds in cooperation with a variety of partners: private, institutional and foreign investors, as well as large corporations.

As of today, 26-backed funds operating as of the end 2017 (including two funds in foreign jurisdictions). In 2017, 4 new funds were established with a total capitalization of RUB 6.63 billion: special-purpose funds created jointly with the Skolkovo Foundation in the form of investment partnership agreements, including the Venture Fund of Skolkovo – IT 1, the Venture Fund of Skolkovo – Industrial I, the Venture Fund of Skolkovo – Agro-technological I and the Tomsk State University Seed Fund.

In addition, RVC laid the foundation during the year for the further implementation of its investment policy. In cooperation with the Far East Development Fund and RUSNANO, RVC created a special-purpose fund (the Far Eastern Fund for Developing and Implementing High Technology) and decided to create a new venture fund together with Roscosmos and VEB Innovations. RVC, in cooperation with its own Infrafund, also launched a tender to select a managing partner for the NTI fund.

BACKGROUND

In 2017, RVC continued to build effective partnerships with foreign management companies in an effort to increase Russia's venture capital market through the creation of new funds. The Company established cooperation with foreign general partners through its membership in a number of investment associations, such as the BVCA, IVC, ILPA, Invest Europe and the IATI, as well as through its activities at various business events, including IVC Smart Capital (Portugal), the Asia PE-VC Summit (Singapore) and the Investors’ Forum (Switzerland).

In addition, RVC, together with its Chinese partners, the Venture Committee of the Chinese National Association for the Financial Promotion of Science and Technology and the Torch Center, organized the second Russia-ChinaForum “Investments in Innovations” in Harbin in 2017. Forum participants discussed cooperation opportunities for the creation of new joint funds under conditions of toughened financial regulation in China, successful cases of Russian companies entering the Chinese market, investment deals, as well as opportunities for promoting technology companies in Russian and Chinese markets with the support of the partner country. RVC presented strong technology companies from its portfolio and partner funds, while Chinese representatives, in turn, demonstrated their readiness for mutually beneficial cooperation.

RVC’s investment activity in 2017:

44.61 USD million volume of exports by portfolio companies in RBC-backed funds for 2017
35.28 RUB billion total amount of RVC-backed funds operating as of the end of 2017
Portfolio companies in funds created with RVC capital were granted 671 patents (including 214 foreign patents) as of the end of 2017
≈5,000 employees work at portfolio companies with investments from funds created with RVC capital
22.5 RUB billion RVC’s share of funds created as of the end of 2017
18.1 RUB billion amount of approved investments in portfolio companies as of the end of 2017
RVC-Backed Funds as of the End of 20171
Short name of the fund Fund amount as of the end of 2017, RUB million
Subsidiary funds
RVC Seed Fund LLC 1,982.0
Biofund RVC LLC 1,500.0
Infrafund RVC LLC 2,000.0
Civil Technologies MIC LLC 500.0
Funds in a foreign jurisdiction2
Russian Venture Capital Market I LP 2,779.6
RVC IVFRT LP 1,381.7
Funds established in the form of closed-end funds (CEF)
Bioprocess Capital Ventures CEF for HR(V)I 3,000.0
VTB Portfolio Investments CEF 3,061.0
Maxwell Biotech CEF for HR(V)I 1,224.4
Leader Innovations CEF for HR(V)I 3,000.0
S-Group Ventures CEF for HR(V)I 1,800.0
IPA funds (industry funds and the Russian-Belarusian Venture Investment Fund)
RusBio Ventures 2,070.7
Finematica Air-cosmic IPA Fund 1,515.0
Da Vinci Pre-IPO Fund 3,787.9
North Energy Fund I Seed 890.5
Phystech Ventures II 935.0
Russian-Belarusian Venture Investment Fund 1,400.0
Venture Fund of Skolkovo – IT I 900,700
Venture Fund of Skolkovo – Agro-technological I 700,700
Venture Fund of Skolkovo – Industrial I 700,700
IPA funds (microfunds)
Softline Seed IPA Fund

136.0 (including RUB 36.0 million 3 )

High Technologies Seed IPA Fund

133.6 (including RUB 33.6 million 3 )

Seed Fund ACP IPA

33.4 (including RUB 8.4 million 3 )

Venture Fund Accelerator IPA

133.4 (including RUB 33.4 million 3 )

Life Sciences Seed Fund IPA

133.6 (including RUB 33.6 million 3 )

Tomsk State University Seed Fund IPA

33.4 (including RUB 8.4 million 3 )

1. To calculate the total volume of funds, RVC only considers funds from private investors in order to avoid double counting since microfunds are created with the participation of capital from RVC Seed Fund LLC, a subsidiary of RVC . Therefore, the total volume of RVC funds comprises RUB 32,999.7 million.

2. From this point onward, the procedure for calculating fund size, including denomination in a foreign currency, will be carried out as follows. For completed investments for fund creation, calculations were made in rubles according to the Bank of Russia rate as of the date of investment. For non-implemented obligations for fund creation, calculations were made according to the Bank of Russia rate as of December 31, 2017 (RUB 57.6002 to USD 1.00).

3. Private investor funding.

Key Performance Indicators of RVC-Backed Funds

  • RUB 18.1 billion: amount of approved investments in portfolio companies as of the end of 2017;
  • Investments in 302 projects approved for investment during RVC’s operations ( as of December 31, 2017, including projects that RVC has exited );
  • The portfolio of RVC funds included 221 portfolio companies as of the end of 2017;
  • 46 exits from portfolio companies.

Subsidiary Funds

RVC Seed Fund (RVC Seed Fund LLC)
Indicator 20121 2013 2014 2015 2016 2017
Number of project companies in the fund 46 56 64 62 64 48
Actual amount of RVC equity in the fund, RUB million 1,980.00 1,980.00 1,980.00 1,980.00 1,980.00 1,980.00
Amount of invested funds, RUB million 565.00 790.00 902.36 1,045.95 1,223.48 1,170.46
Approved investments, RUB million 1,081.70 1,311.50 1,496.60 1,545.94 1,618.50 1,415.27
Number of exit transactions from companies invested in previously 1 5 10 12 13 13
For more information about the fund, see: http://www.rvc.ru/investments/affiliated_funds/fpi/ 1. Hereinafter in this section, indicator values are provided as of the end of the corresponding year.
24 portfolio companies Three new funds and one microfund: RVC funds approved investments worth a total of 1,371.28 RUB BILLION.
Funds created with RVC capital approved investments for 13 new portfolio companies in 2017
26 RVC-backed funds operating as of the end of 2017
21 regional venture capital received expert support with the expansion of their services, including through the development of new investment instruments
RVC Infrastructure Investments Fund (RVC Infrafund)
Indicator 2012 2013 2014 2015 2016 2017
Number of project companies in the fund 9 15 21 25 29 30
Actual amount of RVC equity in the fund, RUB million 499.00 1,099.00 1,099.00 1,099.00 1,099.00 1,099.00
Amount of invested funds, RUB million 136.00 212.00 297.00 435.00 496.00 417.38
Approved investments, RUB million 301.00 675.00 987.00 1185.40 969.00 874.28
Number of exit transactions from companies invested in previously 2 5 6 7
For more information about the fund, see: http:// www.rvc.ru/ru/investments/afiliated_funds/unfrafund/
RVC Biopharmaceutical Investments Fund
Indicator 2012 2013 2014 2015 2016 2017
Number of project companies in the fund 4 8 13 15 18 20
Actual amount of RVC equity in the fund, RUB million 470.00 770.00 770.00 770.00 770.00 770.00
Amount of invested funds, RUB million 16.74 112.79 314.86 494.99 610.25 644.54
Approved investments, RUB million 336.94 769.11 978.11 724.29 743.7 1,053.68
Number of exit transactions from companies invested in previously 1
For more information about the fund, see: http:// www.rvc.ru/investments/affiliated_fund/biofund/
Civilian Technologies from the Military-Industrial Complex (RVC Civilian Technologies)
Indicator 2012 2013 2014 2015 2016 2017
Number of project companies in the fund 3 4 7 7
Actual amount of RVC equity in the fund, RUB million 350.00 350.00 350.00 350.00 350.00
Amount of invested funds, RUB million 63.70 88.00 150.01 127.91
Approved investments, RUB million 30.00 215.80 234.68 217.18 189.18
Number of exit transactions from companies invested in previously 1 1 1
For more information about the fund, see: http:// www.rvc.ru/ru/investments/affiliated_fund/opk/ 1. Actual commitments are shown (approved transactions for which investments are made or planned to be made this year; the fund’s obligations are excluded for projects that will not be implemented due to the refusal on the part of private investors to fulfill preliminary conditions).

FUNDS IN A FOREIGN JURISDICTION

Russian Venture Capital Market I LP
Indicator 2012 2013 2014 2015 2016 2017
Number of project companies in the fund 3 3 3 3 2 2
Actual amount of RVC equity in the fund, USD million 33.25 38.35 38.70 45.69 60.795 60.80
Amount of invested funds, USD million 33 38 38.35 45.35 60.36 60.36
Approved investments, RUB million 33 38 38.35 45.35 60.36 60.36
Number of exit transactions from companies invested in previously 1 1
For more information about the fund, see: http:// www.rusventure.ru/ru/investments/foreign_funds/capital_i.php
RVC IVFRT LP
Indicator 2012 2013 2014 2015 2016 2017
Number of portfolio companies in the fund 4 4 4 4 4 4
Actual amount of RVC equity in the fund, USD million 12.56 12.56 13.84 13.84 13.84 13.84
Amount of invested funds, USD million 17.69 23.90 28.45 32.20 32.70 32.70
Approved investments, RUB million 35.00 35.00 35.00 35.00 35.00 35.00
Number of exit transactions from companies invested in previously
For more information about the fund, see: http:// www.rusventure.ru/ru/investments/foreign_funds/rvcivfrt.php

Funds in the form of an Investment Partnership

Short name of the fund Year of the fund’s establishment The fund’s objective (investment focus) Short name of the management company
Softline Seed IPA Fund 2013 Russian companies that specialize in solutions in the field of cloud technologies, mobile applications, data security systems, digital marketing with Russia being their primary sales market Softline Internet Projects LLC
High Technologies Seed IPA Fund 2013 Innovative companies in IT, biotechnology, new materials, energy efficiency TONAP Venture LLC
RusBio Ventures IPA 2014 Companies in the biomedical industry, including in biomedicine and biomedical services, bioinformatics, biotechnology, medicine and healthcare, pharmaceuticals RusBio Ventures LLC
Finematica Air-cosmic IPA Fund 2014 Investments in promising inventions in the aerospace and related industries Finematica LLC
Seed Fund ACP IPA 2014 B2B software, hardware and software packages Management Company ACP LLC
Venture Fund Accelerator IPA 2014 Innovative companies in the field of Hardware 2.0, wearable technology, IoT, medical DI Group LLC
Life Sciences Seed Fund IPA 2015 Innovative companies in the field of pharmaceuticals, biotechnology, medical equipment and agrobiotechnologies KSI Ventures LLC
Da Vinci Pre-IPO Fund 2015 Companies engaged in the development of technology start-ups, companies that are ready for their initial public offering (IPO) and are able to be included on a list of projects for a specialized fund that allows technology companies to enter Russian and global stock markets Da Vinci Capital Management GP LLC
North Energy Fund I Seed 2015 Cleantech in regard to non-subsidized industries in the existing market in Russia, traditional power industry, renewable energy sector North Energy Ventures LLC
PHYSTECH VENTURES II 2015 Target companies that are at the seed stage and that are implementing projects in the following technology areas of the National Technology Initiative: new materials, additive technologies, sensors, new energy sources, energy efficiency, Big Data, IT in security, decentralized financial systems Phystech Ventures LLC
Russian-Belarusian Venture Investment Fund 2016 Target companies that have a product/service based on innovative technology and design, development and/or are commercializing the technology themselves Infrafund RVC LLC
Venture Fund of Skolkovo – IT I 2017 Innovative IT companies: quantum communications and computations, Internet of things, operating systems and applications, software and hardware for medicine and pharmacology, engineering software, neuronetworks and systems based on such software, electronics, robototechnics, IT security Skolkovo – Venture Investments LLC, IBS IT Services JSC
Venture Fund of Skolkovo – Agro-technological I 2017 Innovative companies in the area of: agro-technology, including digital and drone technologies for agriculture, precision farming, alternative farms, biofertilizers and biopesticides, innovative feed, storage and processing technologies Skolkovo – Venture Investments LLC
Venture Fund of Skolkovo – Industrial I 2017 Innovative companies in the following areas: engineering software, engineering, energy efficiency, additive and hybrid technologies, control, management and warning systems, technologies and equipment for industrial and medical diagnostics, sensor studies, Internet of things, clean technologies, software and hardware solutions for infrastructure protection, Bid Data, unmanned systems, navigation, mechanical engineering Skolkovo – Venture Investments LLC
Tomsk State University Seed Fund IPA 2017 Any innovative companies carrying out activities in accordance with the list of priority areas and/or critical technologies of the Russian Federation National Research Tomsk State University Federal State Autonomous Educational Institution of Higher Education (TSU RI)

Closed-End Funds

RVC owns a share of five Russian closed-end funds run by professional management companies. RVC representatives on CEF investment committees act in a consultative capacity only.

Short name of the fund Year of the fund’s establishment The fund’s objective (investment focus) Short name of the management company RVC’s share in the fund (%)
Bioprocess Capital Ventures CEF for HR(V)I 2007 Healthcare and technologies for life and health/living systems, new materials and chemical compounds (fine chemistry) Management Company Bioprocess Capital Partners 49.00%
VTB Portfolio Investments CEF 2007 New materials and chemical compounds, information technology, network technology and services, alternative energy technologies, industrial equipment, agriculture, forestry and raw material processing VTB Capital Asset Management JSC 49.00%
Maxwell Biotech CEF for HR(V)I 2008 Healthcare and technologies for life and health/living systems Maxwell Asset Management LLC 49.00%
Leader Innovation CEF for HR(V)I 2008 Power industry and energy efficiency, alternative energy technologies, new materials and chemical compounds, network technology and services Leader CJSC 49.00%
S-Group Ventures CEF for HR(V)I 2008 Information technology, alternative energy technologies, power industry and energy efficiency, new materials and chemical compounds, healthcare and technologies for life and health/living systems, consumer market Management Company S-Group Capital Management LLC 49.00%
Actual size of the fund as of December 31, 2017 (RUB million) Actual amount of invested funds as of December 31, 2017 (RUB million) Actual amount of RVC’s investment in the fund as of December 31, 2017 (RUB million) Number of project companies in the fund as of December 31, 2017 Approved investments as of December 31, 2017 (RUB million) Amount of investment funds as of December 31, 2017 (RUB million)
3,000.00 3,000.00 1,470.00 8 3,223.14 3,144.01
3,061.00 3,061.00 1,499.89 8 1,715.26 1,702.86
1,224.40 1,224.40 599.96 9 380.80 372.84
2,100.00 2,100.00 1,029.00 12 2,081.99 1,509.55
1,800.00 1,800.00 882.00 7 1,544.65 1,542.94

VENTURE CAPITAL MARKET COUNCIL

In 2017, the Venture Capital Market Council was created at the initiative of RVC and in partnership with the Ministry of Economic Development. The Council is a standing advisory body within RVC ensuring interaction with the investment community of Russia. The Council consists of experienced professional venture investors, representatives of private and corporate venture funds and associations of business angels.

TAKING INVESTMENT DECISIONS


STAR DEALS

The Leader Innovations venture capital fund, created with RVC capital and managed in trust by Leader CJSC, as well as private investors in the project’s early stage, sold their shares in CDNVideo. The shares were bought by China’s Wangsu Science & Technology Co., Ltd. (ChinaNetCenter and Quantil). The size of the transaction was not disclosed.

VTB Capital Asset Management JSC successfully closed the deal for the sale of the Grid Dynamics project in the VTB Portfolio Investments CEF venture fund. The buyer was Automated Systems Holdings Limited (ASL), a Chinese IT company. The total amount of the deal exceeded USD 128 million, with the fund’s share accounting for 22.4%, and after its full repurchase by ASL, the fund earned almost USD 29 million, a return 15 times greater than the fund’s initial investment.

The RBV Capital venture fund created with capital from RVC and R-Pharm Group transferred a first financing advance to Advanced Gene & Cell Technologies (AGCT). The total amount of the investment was RUB 44 million. Implementation of the project will enable Russia to use genome correction technology clinical practice for the first time for the treatment of serious diseases that are having a high impact on society.


INTERESTING FACTS ABOUT THE FUNDS

  • Da Vinci Capital, the manager of the Da Vinci Pre-IPO fund created with RVC capital, won in the Best Direct Investments Team category at the 2017 PREQVECA Awards.
  • Gazprom Neft PJSC signed a memorandum with Phystech Ventures and North Energy Ventures, both created with RVC capital. The companies agreed to exchange information about start-ups in the oil and gas industry, carry out monitoring and expert analysis of new technologies, discuss prospective market needs and interact with funds’ portfolio companies.
  • Phystech Ventures and North Energy Ventures signed a cooperation agreement with the Ufa State Oil Technical University. The university’s developers will be provided with venture financing and the support of funds for cooperation with corporations. The partners also organized a joint competition for oil and gas technology projects and opened a new site for the G100K project—an international accelerator for oil and gas start-ups—in Ufa, the first round of which took place in the spring of 2017 at Gubkin University in Moscow.