Sistema leads 2018 corporate venture investors ranking by RVC

27/12/2018

Russian Venture Company published a ranking of Russia’s most active venture investors, compiled in association with EY, the National Business Angels Association and PwC, naming Sistema Russia’s top corporate venture capital investor of 2018 with 15 completed transactions. Sistema is followed by Sberbank and Mail.ru, with nine transactions each.

Sistema venture capital fund Sistema_VC, led by President Dmitry Filatov, and Sistema Asia Fund, led by Managing Partner Andrey Terebenin, ranked 2nd the 3rd respectively in the “corporate funds” category. Both funds also appeared in the “classic venture capital funds” category (ranked 15th and 22nd, respectively). 

The ranking defines corporate venture investors as large companies investing directly into startups, through their own venture capital funds, or through other funds as Limited Partners. The ranking only factors in publicly confirmed transactions.

One of the trends in the corporate venture investment category includes a rapid rise in market players’ activity; the number of transactions was up from 23 in 2017 to 77 in 2018. Experts observed that companies tended to pick investments through corporate funds over direct investments. The number of deals executed through funds was 1.5 times more than those executed directly.

RVC noted that the number of active VC funds in the market continued to grow – in 2018 the number increased from 55 to 95, while the composition of the Top-25 list remained more or less unchanged over the past three years, indicating that the industry was relatively stable. 

Dmitry Filatov said that Sistema_VC focuses on niche markets such as agriculture and construction. He added that these industries had remained conservative for some time, but new technologies would assist companies in these areas and make them promising in terms of investment. He noted that education was another interesting market for investors, pointing out the fund’s portfolio includes MEL Science, offering subscriptions to chemical experiment kits and MTS Smart University, an online distance learning platform.

Andrey Terebenin said that India, a key market for Sistema Asia Capital, has seen stable growth and was prepared for change, making it the perfect environment for investment. The fund invested over USD 21 m in 2018 bringing its portfolio to USD 45 m. Some of the fund’s investments include Licious (insert link to post) and LendingKart, an Indian fintech company that was included in the Global Top 50 Established Fintech Firms (more on the blog: LendingKart makes H2's and KPMG's Global Top 50 of Fintech 100 Firms list).

Sistema Managing Partner Alexey Katkov forecast trends in the venture capital market in Russia for 2019: e-commerce, smart infrastructure, the sharing economy and self-employment. He added that sharing economy services aim to connect supply and demand, enabling individuals to make and save money at the same time.

The ranking is reflective of market players’ activity in 2018 as well as major industry trends. It looks at three types of investors: venture funds, business angels and corporations. The ranking includes 214 venture capital players that completed 685 deals worth a total of USD 351 m. VC funds were the most active, responsible for over 65% of total deal volume. The shares of angels and corporations were 24% and 11%, respectively.

The majority of investments came at the seed stage (71%), followed by pre-seed and Series A (11% each), Series B (4%) and Series C (3%). Syndicated transactions represented 45% of all deals.