Deal Book of Russian Internet

8/13/2019 Deal Book of Russian Internet

1/11

Deal Book of Russian Internet

Andrey Kulikov


2/11

2

About research

270 deals covering 2010-2011

In depth details on funding, major investorsand trends

Information on companies, amount raised,

date, round and investors

Experts opinions on the market leading

venture capital firms

Research will be free

We plan to update research on annual

basis.


3/11

Grant providers:

Skolkovo - $16m to 14 teams

Department of science and industry policy and entrepreneurship of Moscow

12 grants, $150k each, $1,7m deployed

Microsoft6 grants, $0,5m, average grant - $80

Tatartstan Investment Development Agency7 grants $17k each

Others

Starting up company is cheap and feasible as never before

Grant financing

$20m(2010-2011)

20102 grants

201159 grants


4/11

Average seed deal value fell by 60% from $395k in 2010 to $155 in 2011

Conveyor seed investors: Glavstart, Fast Lane Ventures, Farminers, eBuro,

Projector Ventures propelled the market Most of seed investment vehicles include some hands on involvement or

mentoring

Russia has no investors, startups say. Russia has no projects investors reply.

Not anymore - problem solved in 2011

Seed financing

$8,7m

22 seed

investments

91 seed

investments

$14,1m

20112010


5/11

Round A average deal value fell by 15% from $3,2m in 2010 to $2,7m in 2011

5 out of 18 Deals in 2010 involved foreign Angels or VCs

15 out 38 Deals in 2011 involved foreign Angels or VCs

Number of deals increases, however average deal size is smaller again.

Round A

$58,4m

18 Round A

investments

38 Round A

investments

$103,6m

20112010


6/11

Later Rounds average deal value fell by 26% from $14,1m in 2010 to $10,4m in

2011

5 out of 5 Deals in 2011 involved foreign Angels or VCs 8 out of 11 later stage deals in 2011 involved foreign Angels or VCs

Later stage activity is fuelled by Foreign VCs and Angels

Later Rounds

$70m

11 Round A

investments

5 Round A

investments

$81m

20112010


7/11

Include deals that are hard to classify under Round A-B-C methodology

Pre- IPO round in Yandex, later stage investment in Qik

Comdi, Documentoved, Nival Network, IVI media-equity deal with iGlobe

$25,6m

3 deals4 deals

$7,1m

20112010

Unattributed


8/11

Reported deal volume:

internet companies reached $1,3bn in 2010 and $2,15bn in 2011 internet start-ups reached $250m in 2010 and $500m in 2011.

Runet champions dominate the landscape all startups combined are 1/4

Investments into mature companies

Yandex

(yandex.ru)1 435 000 000 Equity Capital Markets May-2011 IPO

The leading internet company in Russia, operating the

most popular search engine and the most visited

website.

Search

Mail.ru Group

(mail.ru)912 000 000 Equity Capital Markets Nov-2010 IPO

Mail.ru aggregates differents services: social networks,news portals, game publishers, consumer web services

and many others. Mail.ru is one of the most visited

web sites in Russia.

Consumer web

Vkontakte

(vkontakte.ru)112 500 000 Mail.ru Group Nov-2010 Unattributed Vkontakte is a leading russian social network Social

Vkontakte

(vkontakte.ru)111 700 000 Mail.ru Group Jul-2011 Unattributed Vkontakte is a leading russian social network Social

Ozon (ozon.ru) 100 000 000Ru-Net, Rakuten, Alpha

Associates, Index VenturesSep-2011 Unattributed

Ozon is one of the first online retailers in Russia,

established in 1998 by the Russian software house

Reksoft. Its core assortment are books, electronics,

music, and movies. Now it expanded to sale of travel,

shoes, and electoronics.

E-commerce

Odnoklassniki

(odniklassniki.ru)28 000 000 DST Aug-2010 Unattributed

Odnoklassniki is one of the leading a social networking

sites popular in Russia and CIS.Social


9/11

Qik

(qik.com)150 000 000 Skype Jun-2011 Acquisition

Qik was founded in 2006 to enable mobile phone users to share live video withtheir friends, family and communities on the web and on their phones.

Darberry(groupon.ru) 50 000 000 Groupon Aug-2010 Acquisition Darberry is Russian daily deals leader sold to Groupon Inc.

SPB Software

(spb.com)38 000 000 Yandex Nov-2011 Acquisition

SPB Software is a global company developing software for mobile devices andsmartphones running Windows Mobile, Symbian, iPhone, BlackBerry and

Android OS operating systems. SPB Software is known as a mobile industrymarket leader having produced some of the most popular software apps for themobile environment worldwide.

GIS Technologies

(maps.yandex.ru)5 000 000 Yandex Jun-2010 Acquisition

Gis technologies is mapping data provider.

Kanobu

(kanobu.ru)4 000 000 Rambler Jun-2011 Acquisition Kanobu Network is a gaming media company based in Russia. Provides

different blogs, communities, news about games and gaming industry.

Astrostar

(astrostar.ru) 3 500 000 Direct Group Sep-2010 Acquisition Astrostar develops services, content and software solutions in astrology andrelated fields.

Alawar

(alawar.ru)2 500 000 Almaz Capital Feb-2010 Unattributed

Alawar Entertainment specializes in the global development, publication anddistribution of casual games for multiple platforms. Company is headqatered inNovosibirsk.

LogneX

(moysklad.ru)1 200 000 1C May-2011 Unattributed

Solutions for online accounting. Service is based on Cloud computing. Providestools for internet-stores, sales company, etc.

Loginza

(loginza.ru)600 000 Yandex Jan-2011 Acquisition Loginza develops plugin for identification, which provides unified access to

popular web services.

WebVisor 500 000 Yandex Dec-2010 Acquisition WebVizor records user's activity on the site and enables you to watch it instream.

EXITS - continued

Darberry and Qik are Russian success stories of 2010-2011

Nearly half of exits are technology, product or team acquisitions

No massive market entry of Global leaders via copycat acquisition

Not including companies that facilitated exit via mail.ru IPO (Astrum, HH, etc)


10/11

10

Sectors (combined 2010 and 2011)

Deal volume by sector, 2010-2011

Average deal, $m

Number

of deals

Excluded: Yandex, Mail.ru, Vkontakte, Ozon, Odnoklassniki

Main targets are E-commerce, Video, Software, Games, SaaS

E-commerce includes E-retailing, Travel, Coupons, and other.

Sector Deal volume

E-commerce 338 655 000

Video 173 425 000

Software 70 934 000

Games 42 050 000

Consumer web 22 151 000

SaaS 19 211 000

Social 15 722 000

Mobile 11 232 000

Search 9 000 000

Advertising 7 476 000

Communication 3 834 000

Dating 3 550 000

Business services 2 590 000

Cloud computing 2 334 000

Online Recruiting 1 550 000

Online Education 1 174 000


11/11

$1,3 bn, 59 deals

$2,15 bn2011

2010

Totals

Reported

59 deals $250mstartups

$1050mIPO & mature companies

$500mstartups

$1650mIPO & mature companies

Reported

213 deals

The least transparent sector is seed stage financing, because angels and funds prefer to avoid publicity. Together with

information we collected, we estimate that annually there are 100-150 seed investments made by business angels and non-

public holdings.

At the large scale investments we can think of 20-30 large investments (in past 4-5 years) that have not been announced,such as now.ru, utkonos.ru, Boutique.ru wildberries.ru, bonsport.ru, autoscout24.ru, promenade.ru, bigbuzzy.ru,holodilnik.ru, booking.ru, quto.ru, zvooq.ru, bokmate.ru, t&p.ru, etc).

We estimate the volume of non-public deals is approximately equal to the volume of deals with public information. Thus thetotal deal volume in start-ups etc . may have reached. $500mln in 2010 and about $1bn in 2011.

Documents

Deal Book of Russian Internet