Central regions | Finance, business | Technology & innovation

VEB Bank subsidiary begins venture investing

7 Jun '19
By 2024 VEB Ventures, an investment arm set up by Russias VEB Bank in 2017 as VEB Innovations, wants to invest as much as $555+m in the VC market, the Russian business daily Vedomosti reported.

In addition, the company is hoping to attract capital from partners. At inception, partners will be expected to co-invest with VEB Ventures on a RUR0.9 / RUR1 basis; by 2024, their share is to increase to RUR1.5 per each ruble invested by VEB Ventures. VEB Ventures expects a minimum rate of return to be at least 8%.

VEB Ventures has plans to work with companies that have developed a product and perhaps inked their first contracts but need help as they want to scale up, develop international commercialization strategies, and look for investors.

VEB Ventures is shooting for a four-prong engagement. The company will be directly investing in companies, as well as in three types of funds. Type 1 will be set up in partnership with Russian corporations. One has already been established; in April VEB Ventures pooled efforts with Gazpromneft, Gazprombank and Russian Venture Company (RVC), and the new fund is expected to invest $61.5m in oil and gas tech. Three more corporate funds are being negotiated.

Also, VEB Ventures wants to invest in regional funds across Russia. The inaugural one, with a prospective $30+m capitalization, has been agreed between the company and the government of Yakutia, a vast region in Northeast Siberia.

Finally, VEB Ventures has plans to set up joint funds with international partners. The company tested the waters last year with Indias Srei Infrastructure Finance in an effort to help companies enter international markets, and hopes to continue with other partners.

By 2024, VEB Ventures hopes to quintuple the number of funds with its capital. There are currently just two such funds.
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