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Angel investment in Russia quadrupled this year - study

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(Credit: Reuters) Person holds Russian rouble notes in St. Petersburg.A person holds Russian rouble notes
December 28
12:52 PM 2013

A business angel investing study conducted by National Association of Business Angels (NABA) of Russia, Moscow-based investment consultancy and high-tech investor Atom Partners and state-owned fund of funds RVC revealed that Russian business angel investors had placed $116.5 million in early-stage projects between January and November of this year. The figure indicated a 4.5 times increase as compared to last year.

The study also revealed that individual investors backed 96 projects, with four of them receiving more than $10 million. The volume of funded projects had also climbed 174% on a year-per-year basis.

In terms of sectors, the study also shows that the preferences of business angels had not changed a bit since last year. Majority of the private venture capital, or $77.1 million at 66%, went to the IT and telecommunications sector. Finance, business services, retail, procurement and creative industries sectors were significantly behind IT and telecommunications with a collective $34 million in investment.

Moscow's Innovation Development Center Chief Executive Officer and NABA president Konstantin Fokin said, "Favorable government policies and efforts by business angel associations have helped lower risk barriers and increase information transparency of the market. Its self-organization level, however, is still fairly low, and there's potential for growth."

RVC department of innovation markets director Gulnara Bikkulova, on the other hand, said RVC is looking to eliminate the two major snags that inhibit funding in early-stage companies and successful exits. She said, "We have two fundamental tools to achieve the goal. One is a network of venture partnerships, including regional angel investors leveraged financially by the RVC Seed Fund. The other is the pilot project lunched recently between the RVC Seed Fund and the Moscow Seed Fund and calling for co-investing with business angels. Already 20 angel investors have been picked on a competition basis to work with our fund."

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