Russian Venture Company, a unit of the sovereign Russian Direct Investment Fund, and state-backed lender Sberbank are launching a joint $100 million fund to invest in start-ups.
The fund will target ventures based in the Russian Federation or companies planning to enter the market, RDIF said in a statement on Thursday. It will primarily invest in technology and science-intensive start-ups.
The two parties aim to support the development of early stage technology sector ventures in Russia, leveraging on RDIF’s network of international partners and establishing synergies with projects that are already part of Sberbank’s investment ecosystem.
“As part of RVC's transfer under RDIF's management we plan to actively work on investment into new funds,” Kirill Dmitriev, chief executive of RDIF, said.
RVC is a fund of funds investing into other managers with a view to developing Russia's venture capital market. It has been brought under the control of the RDIF as part of a reorganisation of development organisations in Russia.
The $100m fund with Sberbank will help to “create new opportunities to select, support and successfully develop attractive projects that can make significant contribution to the creation of innovative technologies and emerge as important drivers of Russian economic growth”, Mr Dmitriev said.
Moscow-based RDIF has about $10 billion in assets under management and $40bn of commitments from its partners. The fund generally makes equity co-investments, primarily in Russia, alongside international investors including Abu Dhabi's Mubadala Investment Company and Saudi Arabia’s Public Investment Fund. It has funded the development of Russia’s Sputnik V Covid-19 vaccine, which is produced by Moscow’s Gamaleya Centre and has already been administered to more than 1.5 million people.
“Launching a fund for early-stage start-up investment is the first step toward the implementation of Russia's Innovative Development Strategy and the reform of development institutions being prepared by the Russian government,” Herman Gref, chairman and chief executive of Sberbank, said.
“No such element for the support and development of small, innovative businesses existed in Russia previously. Together with RDIF, we aim to establish a culture of technological and science-intensive entrepreneurship in Russia to cultivate unicorn start-ups that will be competitive in the international arena.”
Sberbank is Russia’s largest lender, accounting for almost one-third of aggregate Russian banking sector assets. The bank, which is more than 50 per cent owned by Russia’s Ministry of Finance, has pivoted towards investing, especially in technology firms.
The bank now considers itself an "ecosystem" of tech firms that are supporting its core banking operations. Some of the technology companies within the lender's ecosystem are already active in the Middle East and others are seeking market entry.