US Venture Capitalists Discover Russia
For the first time in the history of the United States, a delegation of 20 leaders from the top US venture capital funds is coming to Moscow from May 25th to May 27th. The delegation also includes representatives of the US State Department.
The main purpose of the trip is to provide the delegates with an opportunity to learn about Russia and its growing investment potential in the high technology and nanotechnology fields. During the three days of the trip, the delegates will have a unique chance to meet the movers and shakers of the Russian technology markets, including government officials, members of the Russian business elite, famous hi-tech entrepreneurs, major law firms and investment banks, technology executives and local investors. The delegates will also have a great opportunity to explore the emerging scene of the Russian start-ups and learn about the established technology companies with high-growth potential.
The visit is organized by the Russian Corporation of Nanotechnologies (RUSNANO), together with the American Business Association of Russian-speaking Professionals (AmBAR).
The delegation includes the leaders of such well-known funds as Accel Partners, Alloy Ventures, Almaz Capital Partners, Asset Management Company, Atlas Venture, August Capital, Bessemer Venture Partners, Canaan Partners, Domain Associates, Draper, Fisher & Jurvetson, EDVenture, Emergence Capital, Index Ventures, JK&B Capital, Mohr Davidow Ventures, Siguler Guff & Company, Sofinnova Ventures, Trident Capital, Wellington Partners, and Wilson Sonsini Goodrich & Rosati (law firm)
The total value of assets managed by these funds is over $60 billion. The aggregate investment portfolio of these companies includes more than six thousand brands, including such famous names as Amgen, Apple, Applied Biosystems, Baidu, Biogen, Cisco, Dell, Ebay, Facebook, Gartner Group , Google, Hotmail, Idec, Intuit, Juniper, Microsoft, Oracle, Redhat, Salesforce, Skype, Symantec, Teva, Verisign, Veritas, among others.
“In co-financing joint projects, the greatest value that Western venture capital brings is not money per se, but the smart money—the expertise, knowledge of how to grow a high-tech company, and management experience. I am sure that RUSNANO cooperation with top venture funds will create a deal flow resulting in a number of start-ups that will be implemented in Russia,” said Anatoly Chubais, RUSNANO CEO.
“What Russia needs is not so much money as good customers—clients and users who demand useful innovations and who want projects implemented on time,” says Esther Dyson, an angel investor, a Director of Russian search company Yandex, Advisor to Russian IT Services Company IBS Group, Advisor to AmBAR, and also a member of the Russian Government's Advisory Commission on its “Silicon Valley” Project. “The members of the delegation are coming not just as investors but also as role models.”
Although such technological giants as Microsoft, Alcatel, Boeing, Google, Intel, Motorola, Oracle, Samsung, and Sun Microsystems have long had branches in Russia—recognizing the true value of Russia's growing market and intellectual ability of its developers—global venture capital began to look closely at Russia only quite recently. Nevertheless, just as they “opened” Israel, China and India with great success over the past twenty years, today more and more funds are striving to understand the extent to which Russia can become the next region with significant potential for high tech investment.
“Venture capital is a business that is based on trusted relationships. Meeting Russian entrepreneurs, business leaders, and potential co-investors will start to give US venture investors the comfort and familiarity that should lead to more investment in Russian startups. Innovation and great entrepreneurs are not stopped by national borders; venture capitalists shouldn't be either,” said Don Wood, Managing Director at Draper Fisher Jurvetson.
“If you believe everything you read in US newspapers, Russia is an incredibly scary place to be, let alone to do business. Having invested in the country on a few occasions, at Bessemer we understand there are risks operating in the Russian ecosystem as it matures. It's far from perfect, but that's true about most markets, and we have no doubt that scores of important companies will emerge from Russia given the incredibly rich talent pool and intellectual curiosity among its citizens,” said Jeremy Levine, Partner, Bessemer Venture Partners.
“Russia is emerging as a major force in the world economy and as a leader in technology innovation. Venture capitalists have always sought out talented engineers and entrepreneurs, and Russia offers an educated, hardworking and entrepreneurial workforce,” said Brian Jacobs, Founding Partner, Emergence Capital.
“We have been very impressed with the technical expertise and dedication of the Russian entrepreneurs we work with. This trip offers a unique opportunity to learn more about the start-up ecosystem and investment potential in Russia,” said Vivek Mehra, General Partner, August Capital.
“Russia has a rich history of technology innovation and a vibrant entrepreneurial spirit that promises to have economic impact well beyond its borders,” said Jim Smith, Partner, Mohr Davidow Ventures.
“As AmBAR was at the forefront and has always been a major promoter of the nascent Russian venture industry, it is particularly important for us now to support its development and growth internationally,” concluded Anna Dvornikova, President, AmBAR.
AmBAR is a non-profit business association of Russian-speaking entrepreneurs, venture capitalists, engineers, lawyers and other professionals working in the high-tech industry with headquarters in the Silicon Valley. Started in 2002 as an organization of expatriates from Russia, Ukraine and other FSU countries that are involved in technology businesses in the United States, AmBAR has grown into the largest network where Russian-speaking innovators and entrepreneurs can exchange ideas and business contacts. Today AmBAR membership base consists of more than 2,500 business professionals.