Russian entrepreneurs, whether starting or expanding their ventures, can rely on comprehensive support from private or government funds. This material provides a detailed overview of organizations offering assistance to young companies.
Types of Investment Funds
As mentioned earlier, investment funds provide support for businesses. They can be part of a corporate group, have the status of a private or government organization. The goals of investment depend largely on who owns the fund. In this regard, there are:
- Government organizations: These funds support projects in various business sectors with the aim of improving the country’s economic situation.
- Private organizations: Typically, such funds earn through investment activities. The primary goal of private organizations is to derive maximum benefit from supporting developing businesses.
- Funds existing within major corporations: Typically, they invest funds in a product that could be beneficial to them in the future.
| Organization types | Examples of funds of this type |
| Government organizations | Moscow industrial and entrepreneurship support fund |
| Private investment funds | Baring Vostok Capital Partners |
| Funds operating as part of a corporate group | KIROV INVEST GROUP, owned by Kirov Machine-Building Plant |
“When financing a startup, we primarily look at its growth prospects. If a company develops a product in Russia, refines its features, and builds a customer base, and then targets the foreign market – it interests us,” said Denis Sitnikov, Vice President of Investments at LANIT Group.
Types of Assistance Available by Approaching a Fund
In most cases, entrepreneurs receive financial support, sales assistance, or consultancy from investment funds. Monetary allocation is the most common form of support. The amount provided depends largely on the development stage of the firm and the popularity of the product.
Furthermore, the employees of the investment fund can assist entrepreneurs with promotion. For example, they can promote the startup’s product on social networks, mobile apps for their clients, in advertisements, and on the official website.
Significant emphasis is also given to consultancy. Fund specialists can introduce entrepreneurs to market leaders, provide advice on budget reallocation, and more.
Activities of the Russian Direct Investment Fund (RDIF)
RDIF stands at the apex of the pyramid of financial support for businesses. The capital under its management amounts to $10 billion. Primarily, the Russian Direct Investment Fund acts as a co-investor for international companies investing in Russian production.
According to the organization’s representatives, over 200 billion rubles have been invested in various projects during its existence. In turn, the fund’s partners have invested over 1.9 trillion rubles in Russian projects. Among them are:
- China Investment Corporation
- Japan Bank for International Cooperation
- Russia-Saudi Investment Fund
- Sovereign Fund of the UAE, Mubadala
- Russia-France Investment Platform
Established in 2011 on the initiative of Dmitry Medvedev (then the president) and Vladimir Putin (who was the prime minister at the time), the organization invested in the shares of major Russian companies such as Aeroflot, Sovcombank, Transneft, Detsky Mir, Sovcomflot, and Ozon. With the onset of the COVID-19 pandemic, the Direct Investment Fund became known as the supplier of the Russian-produced “Sputnik V” vaccine.
Features of the Industrial Development Fund’s Work
This state organization was created in 2014 at the initiative of the Ministry of Industry and Trade of the Russian Federation. Its establishment resulted from the transformation of the Russian Fund for Technological Development. The organization provides preferential conditions for co-financing companies involved in:
- Leasing of industrial equipment
- Digitization of existing production
- Development of innovative, high-tech products
- Import substitution
- Creation of machine-building projects
- Production of domestic components
The fund, initiated by the Ministry of Industry and Trade of the Russian Federation, provides targeted loans for the successful implementation of new industrial projects (ranging from 5 million to 5 billion rubles, with a duration of up to 10 years). The organization operates a Consultation Center, where individuals can obtain detailed information about the mechanism of special investment contracts, conditions of government programs for industrial development, and more.
For example, with the support of the Industrial Development Fund, the company “Silovye Mashiny” in St. Petersburg opened the first high-tech production of cast blades for power gas turbines in Russia on November 1, 2023. Over 6 billion rubles were invested in this task, with 2.4 billion of that sum provided by the Industrial Development Fund in the form of preferential loans.
How Investments Differ from Grants
Grants represent sources of targeted funding. Consequently, the received funds can only be spent on specific purposes outlined at the time of allocation. Grants for business development are provided through the local government body responsible for the economic development of the region. Information on funding conditions and application details can be obtained from one of the “My Business” centers.
Moreover, there is also an opportunity to reimburse part of the expenses for starting a business through regional programs from the employment center. To do this, the prospective entrepreneur needs to submit the relevant support application before registering an LLC or an individual entrepreneur.
Private Investment Funds
The Kama Flow Investment Fund has been operating since 2013. The maximum investment check size is 350 million rubles. The fund’s CEO, Eduard Adamyan, previously worked in several major telecom industry companies. The organization’s main activity feature is collaborations with academic structures and maintaining connections with research institutions.
The Kama Flow private fund invests in startups focusing on:
- Robotics;
- Digital medicine;
- Sensory technologies;
- Corporate sector development.
For example, in the fall of 2022, the private fund invested 310 million rubles in the activities of the “FIS” brand, the creator of a platform for corporate applications. The main product of this startup is a no-code constructor for information systems. The Kama Flow fund’s investment portfolio includes more than 30 IT startups, including the rapidly growing company SmartC, offering products for traffic management.
The Non-Governmental Fund “MSP” is engaged in:
- Financing interesting innovative and innovative projects, facilitating their scaling;
- Grant payments to talented entrepreneurs;
- Employee retraining.
In addition, the “MSP” non-governmental fund purchases claims and debts from individual entrepreneurs and organizations, creating favorable conditions for the company’s solvency recovery.
“TilTech Capital” is a fund of several private investors (including the creator of “VkusVill”). The organization, founded in 2017, has an investment check size ranging from 20 to 500 million rubles. Fund representatives have rich experience in the consumer market. They provide entrepreneurs with consultations on organizing a management system and developing a business strategy.
“TilTech Capital” is ready to help companies in the early stages of development. The fund primarily invests in companies producing cosmetics, clothing, and developers of business services. In the “TilTech Capital” portfolio are:
The “Checkbox” platform, engaged in automating the delivery of goods (from recruiting couriers to dynamically building routes in real-time);
SHINE IS, a store for cosmetic products for the face and body.
The LANIT Ventures private fund, owned by the IT companies’ group “LANIT,” makes investments ranging from 15 to 300 million rubles. Its employees provide not only financial support but also consulting on legal issues and tax nuances.
The LANIT Ventures fund invests in developing Russian companies:
- Developing various corporate programs and services;
- Engaged in projects using artificial intelligence;
- Developing cloud technologies.
In the private fund’s investment portfolio is the modern online platform ITOGO for equipping homes and offices with electronics, the “Zaprosto!” service for renting smartphones with the right to buy. In the spring of 2023, the fund acquired a 25% stake in the firm Colife. This Russian organization, operating on the coliving model, is oriented towards the needs of tenants and landlords.
The private fund “Voskhod,” part of the Interros Group, appeared in December 2021. The scale of investment in projects is up to $10 million. Vladimir Potanin’s “Voskhod” invests money in the activities of companies involved in:
- Unmanned delivery;
- Agrotechnologies;
- Robotics.
In the investment portfolio of “Voskhod” is the Sciberia project, which is engaged in developing artificial intelligence for analyzing medical images. In addition, the private fund provided support to the company “Leks,” specializing in the development of solutions for finding oil fields.
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