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The startup ecosystem of Russia

Monday, February 10, 2020

The largest country in the world and one of the biggest economies still doesn’t have a perfect startup ecosystem. Nevertheless, innovative entrepreneurship is developing, even though not evenly and not in all regions. There are projects with Russian roots that have become unicorns, and there are startups that are up to become unicorns.

In Russia, there are a number of investment funds that invest in startups. There were also created many platforms — incubators, accelerators — where entrepreneurs can develop and work on their ideas. In this article, I will tell you about how the startup ecosystem in Russia looks like.

Startup Jedi

We talk to startups and investors, you get the value.

General information

The Russian startup market started to grow actively at the beginning of 2010. However, it is worth mentioning that up to that time, there were a few projects in the country that showed rapid growth and reached the capitalisation of $1 billion and more. Nevertheless, it is about the beginning of this decade, when numerous venture capital funds were created and many development programs for innovative entrepreneurs were launched.

Both governmental and private structures are interested in the regional and global development of the startup ecosystem. For example, in 2017, a governmental corporation Vnesheconombank created an associated company “WEB Innovations”, its aim is to become the single window for contacting the VEB Group on such questions as support for innovative projects. In 2019, the company was renamed to VEB Ventures. The company will earn on investments in companies through joint venture funds with corporations and other market players. By 2024, VEB Ventures intends to invest more than 36.3 billion rubles in the venture capital market.

The development of startups in the subjects of the federation is important for Russia, because most regional economies have some kind of priority. Thus, startups can work to develop this area: in Yekaterinburg — developing innovative solutions for large industrial enterprises, in Tyumen — for oil production.

According to the guide created by the Rusbase portal, at the beginning of 2019 in Russia, except Moscow and Saint-Petersburg, there were 12 complete regional ecosystems of innovative entrepreneurship: in Vladivostok, Ekaterinburg, Kaliningrad, Novosibirsk, Krasnodar, Voronezh, Samara, Kazan, Perm, Izhevsk, Yakutsk and Nizhniy Novgorod. The Association of Innovative Regions has been working in Russia since 1999, it unites 16 federation subjects (out of 85). The aim of the organisation is to help regions-participants develop in an innovative direction.

At the beginning of 2018, a piece of research called “Digital horizons: IT-entrepreneur and startup ecosystems in Russia” was published. In the article, it was mentioned that the startup ecosystem in Russia is characterized by a wide range of formats, variety, orientation on different industries of economy and different business model types.

Below, you can find some interesting numbers from the research.

  • At that moment, when the article was published, 700 technological startups functioned in Russia. 62% of them were related to B2C direction.

  • There are 6 startups per 1 million city capita in Russia. In comparison to Israel, there are 214 startups per 1 million city capita, in Singapore — 176, in the USA — 160, in Great Britain — 122, in Finland — 101.

  • The growth domestic expenditure on Scientific Research and Development and experimental-design works amounts to 1,1% of GDP. To compare, in developed countries this figure equals 2–4%

The results of 2019 for the Russian venture market, according to the Venture Barometer study, can be summarized as follows. First, investment volumes continue to grow and according to forecasts, the positive trend will continue in the next year, investors plan to increase investment in 2020.The well-known rumors about the outflow of investors from the country, which have been particularly relevant recently, are exaggerated — only 5% of potential participants in the study went abroad or decided not to invest in Russian projects anymore. But at the same time, in 2019, investors’ hopes for exits were not met (as 49% of respondents state). The hopes for the participation of state-owned companies as a strategic investor did not justify themselves. But the activity of private corporations is growing: the number of corporate funds is increasing, companies are launching their own programs for working with startups, and creating innovative departments.

More information about the Russian venture industry can be found in the PWC & RBC MoneyTree ™: Venture Market Navigator review.


Famous projects

Famous projects

Back to 2017, the leading direction for launching startups were e-commerce (15%) and Fintech (13%). According to the “Startup Barometer” research data for 2019, the most popular niche for Russian startuppers is the production of products and services for businesses — 16% of all surveyed startups are working in this direction. On the second place — artificial intelligence (13%), on the third — big data (11%). Next in the list are educational technologies (10%), internet applications and services (9%), internet of things (9%), marketplaces (8%), mobile applications and services (8%), e-commerce (8%), fintech (6%). As we can see, less than in 2 years, the situation relating to niches has dramatically changed.

And what are those Russian projects devoted to that industries are known to the whole world today?


The first run-time version of the browser appeared in 1993; Yandex was introduced to a general audience in 1997. Today, Yandex is not only a search engine but also many other convenient services including Yandex.Food, Yandex.Taxi, Yandex.Zen, Yandex.Maps, Yandex.Money, Yandex.Maps, Yandex.Music and other multimedia search, cartographic, market search, reference and information, advertising, statistical, social, personalized web services and mobile applications.

In 2010, Yandex attracted $15 million from Baring Vostok Capital Partners fund, Almaz Capital Partners (an international venture fund, its headquarters are in California and Germany) and UFG (headquarters is in Moscow). Prior to this, ru-Net funds (Russia) and Tiger Global Management (an American investment firm) invested in the company in 2000. A fun fact: in September 2019, Yandex announced the launch of a service for the purchase and sale of securities — Yandex.Investments. During an IPO on the Nasdaq exchange, investors acquired 52.2 million shares of the company for $ 1.3 billion.

The company employs up to 9000 employees. As of 2019, the company capitalization amounts to 828.86 billion rubles.

Yandex.Taxi can be called “a unicorn inside of a unicorn”. It was launched in 2011. In February 2018, Yandex and Uber announced the closure of a deal of merging online travel booking businesses in Russia and neighboring countries as part of a new company in which they have already invested $ 225 million (Uber) and $ 100 million (Yandex). Given these investments, cash on the company’s balance sheet is $ 400 million. Group

The company appeared in 1998. The mail service was launched in the same year. Group was founded in May 2005. Since then, Group has launched a number of new services. Today the company owns: the mail service, ICQ messengers, Tam Tam, Agent and Myteam, social networks VKontakte and Odnoklassniki, the game brand MY.GAMES, the service, the service for searching and ordering ready meals Delivery Club and others Services. According to Russian Forbes, the cost of the project is estimated at $ 5.3 billion. In addition, Group is one of the three most profitable publishers of mobile applications for 2019 according to App Annie.


A service for sales announcements about new and used goods, rendering services as well as for posting vacancies and resumes. Today, more than 56 million active announcements are posted on the site, 120 transactions are made every minute, and 400,000 new announcements appear daily.

The website was launched in 2007. In 2010, the company attracted investments that amounted to $26 million from a Swedish concern Investment AB Kinnevik and Northzone ventures; their headquarters is also located in Sweden. In 2012, Avito received $75 million more from two investors — Accel Partners (venture fund with headquarters in California, the USA) and Baring Vostok Private Equity Fund (a Russian private investment fund). In 2015–2019, Russian Forbes included Avito in the TOP of the most expensive companies on the Russian-speaking internet segment — after Group and Yandex. In February 2019, the company’s value amounted to $3,85 billion.


The leading company in mobile game development in Russia and CIS states, it was founded in 2004 in Vologda. The annual revenue of the company amounts to $1,2 billion. The company exists in 107 cities and 22 countries, and it employs more than 1700 employees, one third of which works remotely.

In September 2016, App Annie, the mobile data and analytics platform named Playrix the most profitable company in CIS countries and Baltics. In 2018, the company entered TOP-20 world largest mobile developers.


A dating-focused social network that was launched in 2006. It belonged to the Russian businessman Andrei Andreev and the “Finam” investment holding company, which sold their share to the Blackstone American investment group for almost $3 billion in November 2019. The website and the application are extremely popular in the countries of Latin America and Europe. In 2008, the startup attracted $30 million of investments, in 2009 — $50 million more. At the beginning of 2019, 400 thousand users were registered in the network daily.


A startup developed a technology of high-quality graphene nanotubes synthesis; the price of the product is 75 times lower than the price of existing analogues. Carbon nanotubes can be used in a range of industries because of their unique qualities. In 2019, the project was valued at $1 billion by the A&NN group, that belongs to the billionaire Alexander Mamut, who bought 0,5% share in OCSiAI from a state-owned company for $ 5 million.


An online hypermarket of clothes, shoes, accessories, home goods. The project appeared in 2003, the founders are Tatyana Bakalchuk and Vladislav Bakalchuk. The company is developing at the expense of its own and has borrowed funds without attracting an investor. The company employs 20,000 people. According to the Russian Forbes, in 2019 the company’s value exceeded $1,2 billion.




Russian startups have several ways to attract investments. First of all, using private investors’ funds: business angels and investors-benefactors. Secondly, with the help of crowdfunding platforms. Thirdly, receiving money from venture investors. Fourthly, getting state aid. Fifth, attracting a corporate investor. Let’s scrutinize each of these sources.


Business angels in Russia

These are quite active investors in Russia. The average investment from a business angel in Russia amounts to $250 000.

Russian business angels have created few associations: National Association of Business Angels (NABA), National network of business angels “Private capital”, National commonwealth of business angels; what is more, in large cities, there are local business angels communities.

NABA is an all-Russian industrial association of early-stage venture investors. The organisation includes associations of individual venture investors and early-stage venture funds. NABA was formed in 2009, and in 2011 it became a full member of the European business angels network.


Crowdfunding platforms for startups

The advantage of this option of attracting funds to a startup is the minimum number of limitations and requirements. For example, traditional crowdfunding platforms give a possibility to receive the financing and not to divide the share in the project. Besides, crowdfunding platforms help startup founders not only to attract money but also to see the audience’s reaction to their product and evaluate the demand.

Such crowd-platforms as and are working for a business in Russia. They both were founded in 2012. In 2018, Planeta helped to attract 194 million rubles, which is equal to $3,08 million.


Venture investors

Unlike the number of countries in the region, Russian venture investors are major players on the market of venture investments for quite a long time. According to 2016 data, 56% of venture capital investments came from sources within the country. Venture investors can invest in startups in both early and later stages.

Russian Association of Venture Investments (RAVI) is the largest organisation, that unites all players of the venture capital market. Now, there are 31 full members.

The examples of Russian venture investors are presented below.

Baring Vostok Capital Partners

The capacity of attracted investments: $3,7 billion
A total number of investments: 47

A personal investment holding fund. Fields of interest: industries, among them oil and gas, consumer goods, media, telecommunications, financial services. They invested in Yandex, “Volga Gas” company, Borjomi, and others.

UFG Private Equity

A total number of investments:

Since 1996, it has been investing institutional and private capital in fast-growing companies in Russia and other countries of the region. The total volume of deals involving UFG Private Equity amounted to more than $ 2 billion. One of Yandex investors.

Runa Capital

The capacity of attracted investments: $270 million
A total number of investments: more than 60

Runa Capital is an international venture fund that invests in high-tech companies of different stages of development. The fund appeared in 2010, its founders are creators of the cloud service platform “Parallels” Sergey Belousov, Ilya Zubarev and their coursemate from Moscow Institute of Physics and Technology Dmitriy Chihachov. The fund invested in such well-known startups as Nginx ( a web-server and mailing proxy-server, that works on the Unix-like operating systems) and LinguaLeo (a popular service for learning foreign languages).

Admitad Invest

The capacity of attracted investments: no data
A total number of investments: 14

They invest in SaaS projects, marketplaces, entertainment projects, lead-generators and others. The fund was founded in 2016. In 2017, according to, it entered the top five Russian leaders among seed funds by the number of projects invested in the early stages. Among fund’s projects, there is a Belarusian startup called Blinger. It is an omnichannel platform, that helps companies to communicate with clients in all messengers, social networks, online chats and emails.

Da Vinci Capital

A total number of investments: 17

Independent asset management company operating since 2007. The focus is on direct investment in mid-cap companies in Central and Eastern Europe and other emerging markets. Areas of interest that correspond to the competencies of the team include financial infrastructure and payment processing, business and IT services as well as consumer services. Of the company’s recent investments, it is worth mentioning the financing in 2018 of the Gett project — an international taxi call service.

Kite Ventures

The capacity of attracted investments: no data
A total number of investments: 19

A venture fund that invests in startups on the early development stages; it was founded in 2008. Fields of interest are e-commerce, gaming and communication projects. Among startups, that the fund invested in, were Helping — German cleaning service and — a website for booking hotels.

RTP Global

The capacity of attracted investments: $750 million
A total number of investments: 50

A venture firm, that was founded in 2002. They invested in Yandex and Ozon. RTP Global also invested in Biglion discount service, TrendsBrands online designer clothing store (invested with Kite Ventures), Heverest online sports store, as well as in other projects.


The capacity of attracted investments: no data
A total number of investments: 44

Investment company founded in 2011. The fund has offices in Moscow, Vilnius, San Francisco, and London. They invest in innovative mobile applications. The investor’s portfolio includes more than 40 businesses around the world. Among the largest projects in which the company has invested is Game Insight game developer.

ABRT Venture Fund

The capacity of attracted investments: no data
A total number of investments: 22

A corporate venture fund, that was founded in 2006. They invested in 22 companies, where 16 of them were focused on the global IT market. Buy-VIP online closed sale service is among fund’s projects. This is a platform that specializes in selling luxury clothing. Registered users can buy branded goods at a discount of up to 70% during the discount season. Another fund’s project is Drimni — the developer of social games and the online booking system

Almaz Capital

The capacity of attracted investments: $100 million
A total number of investments: 30

An international venture fund, that invests in companies in the early stages of development. it was founded in 2008. One of the projects, they invested in is Acronis startup, it develops system solutions for users, encountering emergency data restore and their back-upping. Other projects — an online auction of used cars CarPrice and Czech business intelligence platform GoodData.

Russian Ventures

The capacity of attracted investments: no data
A total number of investments: 15

A venture fund, founded in 2008 in Moscow. Projects — a social network for neighbours, a service of gift certificates Kiski and a dog care service


A total number of investments: 11

FunCubator was launched at the end of May 2017 by a Cypriot company with Russian roots FunCorp, in fact FunCubator is an investment division of the company nowadays. The niche of projects is funtech, which is basically a technology-based entertainment. Key areas of search are VR / AR, eSports, AI in music and video, media and the community. The investment volume is from $ 10 “for coffee and night writing code” to $ 1 million with a high scalability potential.

A total number of investments: 7

A venture company founded in 2017, which focuses on investing in technological companies in the early stages of development, specializes in promoting B2C, AdTech and e-commerce. Recently, the fund offered the market its own product — Marketing Due Diligence. The service involves the validation of the marketing competencies of the team, market analysis, analysis of the possibility of scaling using test advertising purchases.

RVC (Russian Venture Company)


The State Fund of Funds and the Institute for the Development of the Venture Market of the Russian Federation, the company was established in 2006. Its headquarters is located in Moscow. The authorized capital of RVC is 30 billion Russian rubles (this is $ 477 million). Together with other venture capital funds, it invests in technology startups. The total number of funds formed by RVC JSC reached twenty nine (including 2 funds in foreign jurisdictions), their total amount is 53.2 billion rubles. As of 2017, he invested in 253 companies. The volume of investments at that time amounted to $ 558 million.

The most complete list of active venture capital funds with Russian roots was compiled by the community of founders on Openland — a platform for chat communities. You can familiarize yourself with it here.


State aids

Fun fact — the average sum of the state aid in the innovative project — $35 000.

Among other government investors — FAISE — a fund that assists the process of developing small enterprises in the scientific and technical fields. According to the data of 2016, the fund gave 4075 aids and the overall investment volume amounted to $92 million.

Internet Initiatives Development Fund (IIDF) — another state investor that invests in projects on different stages of development. In the fund’s portfolio, there are 295 companies and the overall volume of investments amounts to $100 million.


Corporate Investments in Russia

Corporate Venture Fund (CVC) — funds that have one shareholder in the face of a large corporation. It monitors and implements innovations maintaining its market share and ensuring a sustainable existence. Through CVC, a corporation gains access to innovation at a reasonable price.

An example of such an investor from Russia is QIWI Venture. It is the corporate investment direction of QIWI Group, the purpose of which is to find and develop innovative projects. Investors are interested in such areas as Big Data, remote user identification, augmented reality and artificial intelligence, financial services, M-commerce, recognition technologies, logistics services, cloud technologies, open loyalty programs, loyalty card association / management systems and B2C applications.

Another striking example is the partnership of the French largest DIY retailer Leroy Merlin and the accelerator of the IIDF, in the spring of 2018 it was announced that a new direction for working with retail startups was launched. Leroy Merlin is interested in startups that can offer their solutions in the field of technology for talent management within the organization, services that optimize the work routine of employees.

And in the summer of 2019, the largest Russian retailer X5 Retail Group announced access to foreign markets as part of a search for technology startups from Estonia, Latvia and Lithuania for implementation in their own retail chains. The best projects will have the opportunity to implement a pilot project with a company with a budget of up to 700 thousand euros. Later, the geography of the search also included Russia, Belarus, Ukraine and Kazakhstan.

According to RBC, in Russia the share of investments from private funds has been decreasing in recent years, but the share of investments from corporations has been growing. A record deal in this segment is the investment of Group and MegaFon in CityMobil: the amount of the round was more than 2.3 billion Russian rubles, or $ 37.13 million.


Infrastructure: incubators, accelerators, technology centres

According to the data of the Russian Association of accelerators and business incubators (AABIC), in 2018 there were 260 functioning business incubators. Where 151 of them were working in regions and 91 were created on the university bases, 13 incubators were working in clusters and technoparks. Considering accelerators, according to the data of the AABIC, in 2018 there were 103 accelerators. Where 26 of them are private, 22 are corporate and 19 are university-based.

Here is a short overview of the largest incubators and accelerators.

  1. IIDF accelerator. It has been working since 2013 and more than 500 startups accomplished their program. Main working directions are software and the internet of Things. Among their projects, there is VisionLabs, whose team has developed a face recognition system used in a number of Russian banks. The accelerator runs several programs a year with various participation options for startups — participation in the program can be paid for in money, or you can pay a share in the project — from 3 to 7% depending on the terms of participation. The duration of the program is 3 months.

  2. “Skolkovo” startup academy. It is founded in 2012. main directions are telecommunications, human services, constructions, marketing and etc. Among famous graduates, there are BelCar car-sharing service, Lucky Child — an online store of children wear. All participants pass the selection process. The tuition fee is from $ 11,900 to $ 12,700 in equivalent, depending on the draft. The duration of the program is 5 months. Teams from abroad can also undergo training in the Startup Academy.

  3. Global Venture Alliance. It has been working since 2011, and it has offices in Moscow and San-Francisco. More than 550 startups have gone through GVA programs, and in general, they have attracted $30 million. main directions: IT, software, mob mauve and ecological technologies, EdTech, industrial innovations, entertainment technologies, marketing. Among graduates, there is YouScan — a service for monitoring and analysing mentions in social media. All projects that have passed the selection, take part in the program for free. The duration is 3–4 month. Startups from abroad can also apply to the program.

  4. GenerationS. A corporate accelerator, that has been working since 2013. Its founder is RVC. More than 500 startups went through the accelerator, the participation is free. The platform is interested in partnership with any technological startup without accents in specific directions. One of the accelerator graduates — an automated scooter rent Samocat Sharing. The duration is 3 to 6 months, and international startups can also participate in the range of acceleration programs. In particular, they are currently recruiting for the STLC accelerator, where projects from around the world are being considered.

  5. “Fintech Lab” — an organiser of such programs as Banktech, Insurtech, Investtech, it prefers fintech-startups. Among accelerator projects, there is Qrooto — a cashback service based on the mobile application. Before drafting to the program, all projects pass a two-stage selection, the participation is free. The duration of the program is 12 weeks.

  6. Sberbank Accelerator and 500 Startups — a program for the development of IT companies. Accelerator industries of interest include e-commerce, e-health, telecommunications, professional & support services, educational & HR services, lifestyle, e-marketing & e-advertising, e-auto, fintech, logistics, cybersecurity, cloud services, big data and other technologies. All projects participating in the acceleration receive up to 6 million rubles (± $ 100 thousand) of seed investments for a 5% stake in the company, access to the partner network of the accelerator and the Sberbank ecosystem. The process of working with startups is 9 weeks of acceleration in Moscow with 500 Startups.

  7. The Moscow Accelerator, organized by Yandex together with the Moscow Innovation Agency and the Moscow Innovation Cluster Foundation. This is a free equity free accelerator, the duration of the program is 10 weeks. The winners of the program are divided among themselves 10 million rubles (± $ 160 thousand). Focus areas: LogTech, PropTech, EdTech, RetailTech. Minimum requirements for participants: the finished product or MVP, customers and an experienced team of two people.



The startup ecosystem of Russia even now is quite multifaceted, although due to the uneven distribution of both startups and the infrastructure for them, it is still in the process of development.

A few unicorns, that are known both nationally and internationally, were born in Russia. The most famous directions for launching startups are changing from year to year. If in 2017, the majority of startups were launched in the e-commerce and fintech industries, but now, innovative entrepreneurs are choosing business product creation and projects connected to artificial intelligence.

In general, innovative entrepreneurship in the country pays quite a lot of attention and provides a large number of acceleration programs to private structural, operating venture funds: paid, free, impartial, corporate and state.

In general, quite a lot of attention is paid to innovative entrepreneurship in the country both from the government and from private entities, there are venture funds, a large number of acceleration programs: paid, free, equity free, corporate and state.


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