Wednesday, November 19, 2008

Venture and the startups of our time

startupsRecently there was news: Google is planning to open its own venture fund that will invest in promising startups. It is expected that the Fund will lead the new David Dryummond, the chief lawyer company and Senior Vice President of Corporate Development, and Bill Maris, a former business partner and friend of Anna Voysitski, the wife of one of the founders of Google, Sergey Brin.

Google scheme

According to analysts, Google will invest primarily aimed at supporting those startups, which can be regarded as the main candidates to buy the search giant. By investing their own funds - even at the initial stage of relatively minor - Google will be competition to traditional venture capital companies and investment funds. In addition, it will be possible to avoid a sharp rise in prices startups in a situation where the company Brin and Page decided to acquire technology or the development of young companies. Of course, such a tactic in the IT-industry - does not know how Google. Own venture unit has companies Intel, HP, Motorola and other market leaders. Yes, and Google even before the establishment of their own investfonda invested over $ 500 thousand in a number of promising startups. Some good irony of fate is that in 1999 itself, Google has been seen as support for venture capital investors. Include in the 1999-meters $ 12.5 million and received 10% share of Google after the initial allocation of shares of Internet companies, the fund Sequoia Capital has received about $ 4.7 billion Similarly, investing approximately $ 11.5 million in YouTube, after buying the latest Google Sequoia Capital received about $ 480 million

In general, venture funds and company startups are again fashionable. Almost forgotten crisis of 1999-2000, when obankrotilos myriad companies startups, but the lessons learned at that time well. The time has come to a new understanding of the multifaceted notion of startups. Core elements of a young IT-company applying for investment are: the creation of a new company, the withdrawal of the original product on the market, sales of new or innovative projects. Rush into the eyes of novelty - these are the distinguishing feature, which can be startups in the general line of IT-projects.

The American monopoly over

During the first «boom DOT-Komov» in the late 1990's, America was the absolute unquestioned leader in IT-innovation. Now, everything changes: the development of IT-industry in Europe and Asia may soon put an end to the monopoly of the United States in the global high-tech startups. This view of most experts on venture capital investments, which is consulting firm Deloitte. While the U.S. continues to dominate in all six major areas of technological innovation, Europe and Asia quickly strengthen its position in the field of alternative energy (clean tech) and software development. In one day, researchers believe, the Europeans are able to Asian peretyanut «Investment blanket» on its side. And this is already happening. And most of the investment comes just from America. Here is a map of the largest investments alone corporation Cisco:

- Direct investment: China Communications Services ($ 100 million), VMware ($ 150 million), Nimbus Communications ($ 20 million), Alibaba ($ 17,5 million) - venture capital funds: Softbank Asia Infrastructure Funds I, II and III, Bodhi (China and India), 3TS-Cisco Growth Fund III (Central and Eastern Europe), CXC (China), Almaz Capital Partners (Russia).

But interest in the countries of Southeast Asia as time is understandable. Fewer than expected have been developments in Europe. Thus, the new study, Deloitte and the U.S. National Venture Capital Association (National Venture Capital Association - NVCA) new leader in alternative energy is called Germany. U.S. to continue to attract more venture capital funding in clean tech, but at least 43% of respondents reported experiences of German researchers fotogalvanike and other «green» technology. It should be noted, however, that the Deloitte study is not based on real investment, and the views of venture capitalists. In the field of telecommunications, the second region for investment attractiveness (in the opinion of those surveyed) suddenly became Japan. It is a little behind in this regard from the United States. In the production of semiconductors second investor named Taiwan (31%), in third place - again, Japan (26%). USA was given 70% of the vote. As for software development, the leaders are here, too, USA (87%). Second place - India (35%), followed by Britain (13%), Israel (11%) and Germany (9%). Russia and the CIS countries made no mention of any of the main areas of investment. In general, more than half of venture capitalists in the world (57%) invested outside the United States. That figure rose slightly compared with last year. While the U.S. still do not lose their positions, innovations are distributed around the world: the rest of the world is looking for what he has advantages.

There is a good time to remember history. Indeed, the U.S. became a pioneer venture business: venture capital as an alternative source of financing for private business there is in 50 States in the mid-nineties. «Votchinoy» venture business has become Silicon Valley. A European Venture Business emerged in the late 70-ies. Britain was the pioneer. Nevertheless, venture business in the Old and New World are still different. The European venture capital is invested primarily in the business «core sector» economy, and American - in new technologies. The main investors of European venture capital funds are banks and the U.S. - pension funds, insurance companies and private individuals.

Venture in English

In Russia there is now creating a wave of venture funds, directly initiated by the state. These funds appear with the participation of «Russian Venture Company» (MER), whose capital is provided by the State. Last year, the State has invested in MERs 15 billion rubles, and this has pledged to give twice as much. Investment MERs are aimed at IT and telecommunications, nanotechnology, electronics, biotechnology, medicine and alternative energy. While the money created by the state of Russian venture capital firms and startups are beginning to enter into the process of development is difficult to call a success. According to Angel Investor, under the concept of MERs in 2007 with the participation of the company should have been a 8-12 venture funds with combined capital of about 30 billion rubles. In fact, in 2007-m formed only two funds management companies: «Bioprotsess Capital Partners» and «VTB Venture Fund». According to the MER, these funds should provide venture capital (ie risk) capital to 200 innovative companies and become an indirect catalyst for the creation of some 1,000 enterprises sector, hi-tech. But so far only six startups received money from investors. Another 15 projects from the sphere of information technologies should be available in September at an average of 100 to 150 million rubles from «VTB Venture Fund». However, their names in the fund has not yet been called. It is, however, that one of the projects associated with software development in the field of information security. This, however, is not to create a company that would have competed with «Kaspersky Labs» or Symantec, and the introduction of a new technology for detecting computer viruses. Also, venture fund VTB intends to invest in the team that developed software for mobile phones. Another project is creating technologies for the production of 3D-video - it will be used to create combined to shoot films and advertisements. Other startups implementing a project in distributed computing (Grid Computing).

Formally, the Russian Venture Company distributes money for a transparent competitive basis, the experts say. But the process is not as fast as originally promised the framers of the fund of funds, and mostly due to the fact that MERs actually works within the existing administrative system in Russia. And in many decisions «vylezhivayutsya», long-term negotiated with all stakeholders, often long delayed due to administrative reshuffling, etc.

Finam as flagship

In the face of rapid development of the Russian IT industry more and more independent (private) investfondov declares its plans to invest in young and promising computer company. One of the absolute leader of this market - an investment holding company «Finam». In the I half of 2008 holding company invested in a number of major projects and intends to significantly increase their number in the near future.


Investment holding company «Finam» provides a full range of investment services and operates in more than 80 cities in Russia. «Finam» is among the leading Russian IT-investors, overseeing the company «Mamba», E-generator, MoneyMail and others, owning stakes in companies «Ashmanov and Partners», «Astrostar», «Alavar», the social network Badoo. com and several others. Holding the first Russian mutual funds, specializing in investments in high-tech - «Finam - Information technology». To date, under the management of «Finama» has 11 funds. Assets of all mutual fund companies at the end I quarter 2008 amounted to 2918.33 million rubles (95% of total assets). The increase in assets of mutual funds over the past four quarters totaled more than 90% mainly due to growth in assets closed unit investment fund «Finam - Information technology».

The first Russian fund for investment in IT projects was formed «Finamom» in 2006. Then, have been identified priority areas for investment: they have become IT-stock companies engaged in software development, as well as create, maintain and manage various online projects. However, investment company as IT-investor has started much earlier - in 2003 - when «Finam» acquired company «Begun» (system of placing ads on sites in Runet), which at that time worked in the market just a year. Now «Begun» (recently sold the corporation Google) provides approximately 2.8 billion impressions a week, a network service coverage was 18 million Internet users.

Another major investment fund subsidiary «Finama» is the project «Mamba» - now this is one of the largest dating service and communication in runet (about 8 thousand separate sites of acquaintances and friends of large sections of portals). Now the system «Mamba» registered about 9.9 million questionnaires and daily «Mamba» visit 1,5-2 million users. Projections of revenue growth for the full year 2008 represented approximately 50% but now «Mamba» overcome this bar, earned in the first half-year 222 million rubles (on the basis of 2007 th company received 300 million rubles). In «Finame» for the search and selection of investment projects in the field of IT special department responsible IT-investment that works for the benefit of an investment holding company «Finam», and the fund «Finam - Information technology». Every month, the Department is considering about 30 projects. For investment by the sector of information and communication technologies, Internet technologies (online services, online media, video, audio, social networks, e-commerce, etc.), software, infrastructure (ISP, hosting), mobile technologies and services . As they say analysts «Finama», among many startups proposed by the majority of clones, some other ideas difficult monetized or they are not mature sponsors. In this arrangement, the applicant company's participation in the selection of IT-department «Finama» simplified - to consider are not only ready business plans, but also made good business ideas. The time interval of one investment project ranges from three to five years.

According to many experts, today Russia's IT market - one of the fastest growing in the world, and some of its segments already growing at 50% per year - for example, the market introduction of ERP. With regard to market investment proposals, in Russia it is working as a local specialized funds like «Finam-IT», and overseas. In early July this year investment initiative put forward Corporation Cisco - together with the Almaz Capital Partners, it has formed a core capital fund Almaz Capital Russia 1, LP, which amounts to $ 60 million initial investment in Russian startups expected in the coming months. The experts do not exclude that in the future, Cisco will buy the company, proinvestirovannye Fund.

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