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Cloud nips at the heels of E-commerce

0 July 2012

DISCLAIMER

The provided material is based on public data as well as private sources. The estimated total was made by Startup Afisha analysts.


SUMMARY

The Russian VC market saw moderate levels of activity in July 2012. A number of existing projects (one year or older) received funding and few new players emerged. Investors preferred to fund teams at incubators (SeeMedia.ru, Jelastic, Choister) or co-invest with other funds/angels.

Once again, E-commerce and cloud technology proved to be most attractive to investors. A good example of the former was rising Russian e-commerce star KupVIP’s $600,000 investment in online shopping certification startup. Nadezhnaya Pokupka’. The company offers similar services to buy-safe.com, TRUSTe, Trusted Shops and eKomi, with a focus on Russian e-commerce.

 DEAL OF THE MONTH

Palo Alto-based Russian-Ukrainian startup Jelastic (formerly Hivext) announced that it received a $1 million grant from the Skolkovo Foundation. The investment will be used to fund a number of pilot projects and develop a prototype of the Jelastic Private Cloud, which aims to provide a secure hosting platform for large corporations and government agencies.

The company has already started to develop a public Java PaaS with a grant from the Moscow Department for Business Development and seed funding from Runa Capital. The platform allows users to deploy, manage and scale any Java applications to the cloud without having to modify the code and charges users according to their apps’ resource consumption as opposed to their instance size. The platform is currently available in Europe, North America and Russia.

According to Jelastic, the Private Cloud will be designed to simplify and reduce the cost of developing and deploying enterprise applications written in Java, PHP and. NET.

FUND OF THE MONTH

Vadim Kurin and Gregory Berenstein, the former owners of Russian ISP NetByNet Holding, which was sold to MegaFon for $270 mln in June 2011, have launched a new investment firm, Zoom Capital, which will focus on e-commerce start-ups.

Zoom Capital's portfolio to date comprises two companies: e-commerce credit service Vse v Credit# and micro-finance startup VIVA Money#. Zoom aims to help VIVA expand its operations by opening branches in Siberia and Far Eastern Russia, and increasing amounts its working capital.

Zoom Capital plans to make between one and two further investments of $1-10 mln in consumer internet or financial services startups this year.

STARTUP OF THE MONTH

SEO and internet advertising automation platform Seopult raised $10 million from iTech Capital for a 25% equity stake .

Seopult currently operates in CIS countries and Poland, but the funds raised will be used for expansion into Europe and Asia.  Beyond simple interface localization Seopult will offer geo-tailored service plans and SEO technology targeting local search engines.

SeoPult Group comprises Click.ru (pay per click advertising), SeoPult.tv (online TV) and Cybermarketing.ru.

iTech Capital was founded in 2011 and focuses on IT  and New Media investments.

PERSON OF THE MONTH

Mikhail Vinchel, former owner of investment company "Prospect" (a major player in the Russian brokerage market), has joined Buran Venture Capital (BVC) as a partner. The fund, which was founded in Autumn 2010, currently has $10 million dollars under management and expects to increase that amount to $50 million within 4-5 years.

BVC invests in early stage startups. Its portfolio currently comprises two projects: insurance price comparison site SravniKupi.ru, and Epistograph, an information management tool developed in Budapest. BVC also invested in JustEva.ru, a Russian underwear e-commerce site which it exited.

Vinchel is currently a member of the Advisory board and is a Limited Partner. The two founders and General Partners of BVC, former investment bankers Michael Salontai, have  themselves contributed over 25% of the fund. Vinchel may be joined by Grigory Finger this autumn.  Finger worked at Mail.ru Group and co-founded Digital Sky Technologies with Vinchel and Yuri Milner.

MONTHLY VOLUME OF ANNOUNCED DEALS. DYNAMICS

In July 2012 a total of approximately $28 million in venture capital was invested in Russia, down 4% from June 2012#. The largest deal was Zoom Capital’s $10 million investment in Seopult (see above).

Number of deals in breakdown by size in '000 USD

MONTHLY NUMBER OF DEALS. DYNAMICS

In July 2012 a total of 11 venture capital investments were made in Russian companies, more than double the amount in June.

Number of deals growth dynamics

MONTHLY FUNDS' NEW COMMITMENTS. DYNAMICS

In July 2012 venture capital funds operating in Russian market announced their readiness to invest in Russian projects around USD 70 mln in total by the end of 2012.

NUMBER OF ACTIVE FUNDS ON RUSSIAN MARKET

There were 101 funds working on Russian market in July 2012 inclduing managing companies, accelerators, investment-companies. That makes it an increase of 3 funds comparing to June 2012.

STARTUPS BREAKDOWN BY TECHNOLOGY

In July 2012, the investments in startups distributed according to niches as follows



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