Return to search

IBM aims to build VC infrastructure’ in Russia

Western companies and investors hope that partnering with Russian companies and entrepreneurs can thaw the last vestiges of the Cold War that may hold back Western-style innovation. To that end, IBM Corp. announced last week that it launched a free software and educational program in Russia to promote open standards and open source.

The Armonk, N.Y.-based IT giant’s “developerWorks Russia” program will allow software developers and entrepreneurs free access to software, tools and other resources to help them build open standards-based applications. The developerWorks program has more than 5 million users worldwide.

Drew Clark, director of strategy and emerging markets at IBM Venture Capital, says that it is a part of the company’s strategy to bring these standards to entrepreneurs. “We have to go out to where the innovation is,” Clark says. “We can’t expect that all the required innovation is still in Silicon Valley or Boston or New York.”

IBM Venture Capital, despite its name, does not make venture investments. Instead, it creates and capitalizes on partnerships between VCs and entrepreneurs. Clark says that IBM is trying to help fill in the gaps that would make the former Soviet Union fertile ground for venture capital. “Russia is an amazing environment for innovation. The problem with Russia is that it doesn’t have a venture capital infrastructure. We’re taking some steps to get venture investment going there.”

Last week’s IBM announcement follows a spate of other company activity in the former Soviet Union. In 2004, it expanded its IBM Innovation Center in Moscow and introduced about 50 U.S. venture capitalists to almost two-dozen Russian tech companies.

Last year, IBM created a Venture Capital Advisory Council to help promote innovation and open standards in emerging markets. Among the venture firms on the council is Draper Fisher Jurvetson, which is also active in the former Soviet Union (see related story, pg. 1).