The Importance of Investing in Relationships
By Paul Hodkinson
Two years on from a high level delegation to Moscow, US venture firms are bearing fruit from Russian investors.
Venture capital is all about making investments and seeing them grow—sometimes this even applies to relationships.
In 2010 it emerged a delegation of senior US venture capitalists and government representatives were going to Russia to meet with then-Russian President Dmitry Medvedev and others about investment and technology collaborations. There was even talk at the time that they may be joined by Governor of California Arnold Schwarzenegger on the trip.
Two years on the meetings appear to be paying dividends with today's announcement by New York firm I2BF Global Ventures that it has raised $53m of a $150m fund with the help of state-owned company Russian Corporation of Nanotechnologies, or Rusnano.
The seven-year fund will invest in international nanotechnology that can be applied in Russia with a focus on the resource sector as well as water and agriculture.
It is the latest US venture fund commitment for Rusnano, which has in the region of $10bn earmarked to invest in new technologies, and outlines its position as a key player in the global venture capital market.
It has also committed nearly $1bn to five other US venture funds. It provided $200m of the $500m Burrill Capital Fund IV, $125m of the $250m Harris & Harris and Rusnano Opportunity Fund, $380m of the $760m strategic collaboration between Domain Associates and Rusnano, $75m of the $200m Pangaea Ventures Fund III and $50m of the $150m DFJ-VTB Aurora fund.
In I2BF’s case the firm’s links with Russia are understood to benefit from the fact that its managing partner is Russian. Ilya Golubovic founded I2BF in 2005. Commenting on today’s announcement he said: “The opportunities to roll out nanotech applications and also production facilities in Russia are widespread and we will be using our global footprint to channel the best technologies into this market.”
I2BF also secured backing from Rusnano for a $100m Russia and Kazakhstan nanotechnology fund, which is being co-managed by venture firm VTB Capital, late last year.