VTB Group is joining forces with the European Bank for Reconstruction and Development (EBRD) to launch a 3-billion Rouble (?88 million) venture capital fund for stimulating commercial development of advanced and innovative technologies.
As EBRD President Jean Lemierre said, "investing in this fund, which will target private sector initiatives, once again demonstrated the Bank's commitment to the diversification of the Russian economy and the development of the country's considerable high-tech potential".
Alongside with VTB, the Russian Venture Company, a state owned corporation, is a co-sponsor of the fund. The fund will be managed by CJSC VTB Asset Management in cooperation with DFJ (Draper Fisher Jurvetson), one of the leading venture companies in the USA. EBRD, which will invest RUR 612 million, is to have a 20 percent stake. Apart from capital, EBRD is contributing its unparalleled expertise in investing in the Russian market.
The fund's strategy in Russia will be to invest between USD 1 million and USD 10 million in each company, usually in exchange for a significant minority stake. It aims to invest in companies at various stages of development, providing seed capital for start-ups but also for mature projects, which need to expand.
The fund's initial investment targets will include information technologies and Internet, semiconductors and biotechnology, medical and laser equipment, nano technologies and composite materials, as well as other promising, value-added areas that can increase the global competitiveness of Russia's high-tech sector.
According to VTB Chairman and CEO Andrey Kostin, "VTB participation in venture capital market is one of the basic tasks in implementing VTB Group investment business strategy. This fund being formed under the support of the Russian Government will contribute to increase the access to finance Russian companies, engaged in the sphere of advanced technologies".Russia's leading research institutes are to act as scientific advisors to the fund.