The Russian government is doubling its commitment to the Russian Venture Co. (RVC), a public-private partnership designed to stimulate investment in high growth technology businesses in the country, to $1.25 billion, PE Week has learned.
The government expects to announce the move later this week.
The first iteration of the RVC was designed to put $550 million in eight to 12 Russian venture funds that invest in Russian companies. The RVC would contribute up to 49% of the limited partner commitments to a fund, with the expectation that the other 51% will come from non-governmental LPs.
The second version of the program will expand the function of the RVC “beyond fund management to full-service technology investment and market development agency,” according to a document sent to PE Week in advance of the announcement.
The increased fund size dovetails with certain proposed regulatory changes designed to make investment more comfortable for foreigners and to protect intellectual property that the Russian government will soon consider.
The RVC is also expected this week to announce other venture funds that it will invest in before the end of the year. So far, the RVC has made three commitments in the following:
• It invested $58 million in a $118 million fund being raised by VTB Asset Management, a partnership formed by Russia’s Bank VTB, The European Bank for Reconstruction and Development and other investors. The group partnered with Draper Fisher Jurvetson to up the fund size to $150 million and renamed the fund DFJ-VTB Aurora at the end of September.
• It put $56.8 million into Bioprocess Capital, a $116 million biotech fund created by Pitch Johnson’s Asset Management firm, with a $56.8 million investment. (Johnson was instrumental in advising the Russian government on how to set up a matching funds program.)
• And it committed $37.8 million to a $115 million being raised by Finance Trust, a firm established by Israeli financial group Tamir Fishman and Russian partners.
Of the 68 countries tracked for venture investment last year by Thomson Financial (publisher of PE Week), Russia ranked 27th in amount invested ($91 million) and 29th in number of deals (12). It was surpassed by Denmark ($650 million in 63 deals), Italy ($387 million in 59 deals) and Belgium ($375 million in 74 deals).