Russian VC Funds Pinpoint U.S. Investments

01 October 2013

By Nicolas Mokhoff

Anatoly Chubais, head of RUSNANO, the Russian Government innovation investment arm, stopped by the two successful U.S. semiconductor companies in Silicon Valley in which RUSNANO has invested: Quantenna Communications and NeoPhototonics. Chubais likes what he sees as the ideal way of conducting business by RUSNANO in the U.S.

Chubais’ U.S. visit was part of Russian Innovation Week (RIW), held in Boston and in San Jose, Calif., last month. The gathering on both coasts had as its goal American-Russian business networking and cooperation in what is loosely termed “innovation development.” It showcased bilateral business opportunities in nanotechnology, clean-tech, biotech, pharmaceuticals, life sciences and IT.

Three Russian quasi-government innovation entities—RUSNANO, Russian Venture Capital (RVC) and the Skolkovo Foundation—sponsored the two venues in Boston and San Jose, which featured an agenda laden with U.S. and local government speakers as well as key Russian government and company executives.

Heading the Russian delegation were Chubais, CEO and chairman of the executive board at RUSNANO; Igor Agamirzian, CEO and chairman of the executive committee at RVC; and Viktor Vekselberg, president of Skolkovo Foundation.

Rusnano Capital has invested in almost 100 projects so far. “Twenty two projects are based here in the U.S., our number one partner, with $150 million already invested here,” said Chubais.

The stipulation for investments is to have the foreign company either open an R&D facility in Russia or build a factory there. “We want to encourage the transfer of hi-tech knowledge and commerce in both directions,” said Chubais, who as a Russian government official in the 1990s was inolved in privatizing state entities.

He remarked that trade between the U.S. and Russia diminished by 7 percent in 2012 with the oil sector being the culprit. “My strong belief is that we can reverse this trend by investing in innovation,” Chubais said.

Last year, Quantenna (Fremont, Calif.) closed a $79 million funding round led by $40 million from RUSNANO.

Quantenna has developed 4x4 MIMO chip sets for wireless video content distribution around the home and other demanding applications. “The round enables us to expand our presence in Russia with the addition of a team of highly qualified specialists,” said Quantenna CEO Sam Heidari, at the time.

Rusnano Managing Director George Kolpachev became a member of Quantenna’s board of directors, and RUSNANO investment manager Vladislav Tropko became a board observer. Quantenna is in the process of opening a Russian subsidiary.

Also last year RUSNANO acquired 4.97 million common shares of NeoPhotonics Corp., worth $39.8 million at the time. NeoPhotonics appointed RUSNANO Managing Director Sergey Polikarpov to the board of directors.

“One of the unique advantages of NeoPhotonics is its vertically-integrated design and manufacturing processes for photonic integrated circuit-based products,” said Polikarpov. “The company’s planned research and production facilities in Russia are intended to be able to perform a wide range of steps from PIC development to processing and fabrication.”

NeoPhotonics (San Jose) designs and manufactures photonic integrated circuits for high-speed communications networks.

Startups

“We need to explore the quality of R&D from Russia and commercialization talents in the U.S. for mutual gains,” said Axel Tillmann, CEO of RVC USA, a Boston-based venture capital fund for early-stage start-ups. RVC USA is a partner of Moscow-based Russian Venture Capital, a government-sponsored $1 billion fund-of-funds whose mission is to promote the development of an innovation-based economy in Russia.

Whereas RVC provides seed money, RUSNANO Capital uses its funds to focus on companies in Russia and abroad to help with growth and expansion.

Silicon Valley Visits

A couple of electronics startups made funding pitches at RIW in Boston. 4D Energetics Inc. develops batteries based on adsorption, as opposed to absorption, of energy from gases. The company is seeking $7 million for launching pilot production and delivery of first products to customers for testing.

The second company, Lab-n-Fab LLC, develops a reflective optical filter that reduces display power consumption of television and phone screens, effectively doubling battery life.

Lab-n-Fab was started by Massachusetts Institute of Technology and Boston University graduates to license/sell its technology to display manufacturers.

Lab-n-Fab was selected and admitted as a resident of the Skolkovo R&D Science Park near Moscow, a fledgling center for an international technology ecosystem.

Last month the Skolkovo Foundation received $15 billion in state and private funding for funding innovations for the domestic economy.

Source: Electronics360, 30.09.2013