RB Partners Group, an international group of companies focusing on investment and banking services for Russian and international midcap companies, prepared and published its venture market report for 1H 2017.
The first six months of 2017 were manifestly marked by headway—not so spirited as we all wished it had been, but dynamic enough for a market that is still recollecting itself.
Key findings and trends for the first six months of 2017:
• Declining number of deals: from 162 in 1H 2016 to 149 in 1H 2017
• A notable increase in investment amount: from $98m to $321m
• The interest in B2B segment strengthened significantly. The investment amount doubled (up to $98m), while the number of deals increased only from 69 to 72. The B2C segment left us with nearly identical results
• Investors pinned their new hope on transport, VR/AR and fintech projects
• Corporates stepped up funding at the expansion stage appreciably, a result that can be called a breakthrough
• Main investors were venture funds, corporates, private investors with a large ticket but without any fund set up for them—they started to invest more actively at the start-up and seed stages
• The average deal size for 1H 2017 grew significantly from 1H 2016’s $0.6m to $2.2m at all stages except start-up and growth
• A long-term trend tied with exits from venture companies is being shaped. The number of exits increased from 7 to 13, meanwhile in money terms, a total value of deals decreased from $439m to $79m. This trend could be explained by several large deals that occurred in 1H 2016 (Gett, Headhunter)
• Investors routinely bet on software-related segments; at the same time blockchain is becoming a new trend on the venture market.
The following important trends and events could be pointed out as main drivers of the venture market development:
• There is an appreciable rise in early-stage investment. On the other hand, late-stage investors feel comfortable in the global market
• The VCs entertain reserved optimism regarding the attempts by the government to give impetus to the market
• Almost unanimously, investors referred to fintech trends, such as cryptocurrencies and ICOs, as the most notable development in the reporting period. Next in a “significance” ranking are deals by IT corporations, primarily Mail.Ru Group
• Blockchain is a hot topic, and the VCs envision wide applications for the technology. In addition, they add VR/AR and fintech to their list of the most promising technologies.