Презентация Арсения Даббаха, CEO и управляющего партнера RMG partners, с конференции СтартUp Travel 2016, проходившей 22 июня 2016 года в технопарке Строгино.

1. Venture Capital
market trends
2016
Moscow
June 2016

2. CONTENT
2
1. Introduction
2. Global VC trends
3. Russian VC market
4. Discussion

3.  RMG partners spun off from oldest Russian investment banks.
 20+ years of experience on the financial market and a proven track
record in value creation solutions for Midcap private companies.
 As a member of the global M&A Worldwide network provides with an
access to the international markets and cross-sectorial expertise
 As a Member of NAIMA promotes Private equity / Venture Capital
and other alternative investments
History Evolution
1993-2006
Brokerage &
stock market
2007-2009
Asset management
2010-2013
Strategy & M&A
2013-2015
Direct investments
2016 – now
Value management
VALUE
CREATION
M&A
FUNDRAISING
20+ YEARS
EXPERIENCE
STRATEGY
LONG-TERM
PARTNERSHIP
VC & PE
INVESTMENTS
NETWORK
IN 45
COUNTRIES
CROSS-
BORDER
3

4. VC|PE market research
4
 Volume: 20+ pages
 Languages: EN, RU
 Release: Each quarter / 4 issues per year
 Formats: Electronic
 Paper size: A4
 Free subscription
 RMG client database
 East-West Digital News (EWDN) subscribers database
 RMG online resources, RMG mobile application (EN, RUS)
 Partnership with Marchmont Innovation News, Moscow Seed
Fund, Bargan News, NAIMA and others (EN, RUS). Media
partners’ support offers active links on company web-site
following the report location
 RMG Media database (EN, RUS)
Russian Venture Capital Market Overview is focused on International and Russian target audience:
 Investors: investment funds, Venture & Private Equity funds, banks, financial groups, family offices & other
 Venture entrepreneurs, startups
 Governmental and market development institutes
 Consultants and service providers on financial market
 Non-profit organizations and associations, state institutions, state controlling entities, stakeholders
The primary goal of this report is to make Russia’s VC/PE sector more alluring for both foreign
and domestic investors and increase the efficiency of contacts between investors and innovative
companies seeking financing. The main barrier to growth of Russia’s venture capital market is the
lack of objective information. Foreign and domestic investors do not have sufficient reliable data
and analytical materials on innovative markets and projects in Russia. This slows down the
search for investment targets, makes investment decisions more difficult, increases costs for
project analysis and due diligence, and restricts the size of the pool of potential venture investors
KEY PARAMETERS MAIN MEDIA & DISTRIBUTION PARTNERS
TARGET AUDIENCE

5. VC|PE market research
5

6. June 2016
Marketoverview
6

7. June 2016
Marketoverview
7
Hi-Tech Revolution
is taking place

8. June 2016 8
Hi-Tech
DISRUPTION
FINTECH AUTOTECH
REAL ESTATE TECH
CYBERSECURITY
AEROSPACE
NEUROTECH
ENERGYTECH
IOT / ROBOTICS
BIG / CLEVER
DATA
FMCG
SUBSCRIPTION
INDUSTRIALTECH BIOTECH
ADD TECH ED TECH

9. June 2016
Marketoverview
9

10. June 2016
Marketoverview
10

11. June 2016
Marketoverview
11

12. June 2016
Marketoverview
Q4’15 SAW A RESET IN FUNDING AND DEAL LEVELS AND THAT
CONTINUED IN Q1’16
12

13. June 2016
Marketoverview
13
2015 WAS THE HIGHEST SINCE 2000 AND ALTHOUGH 2016 IS
SLOWER, IT IS STILL ON PACE TO BE A HUGE YEAR

14. June 2016
Marketoverview
14
MEDIAN EARLY-STAGE DEAL SIZE TICKED UPWARD TO 5-
QUARTER HIGH

15. June 2016
Marketoverview
15
GLOBAL MEDIAN LATE-STAGE DEAL SIZES CONTINUED
TO FALL

16. June 2016
Marketoverview
16
THROUGH Q1’2016, THE PACE OF “PRIVATE IPOs” HAS
DECLINED…

17. June 2016
Marketoverview
17
BIRTHING UNICORNS HAS BECOME HARDER

18. June 2016
Marketoverview
18
NEW UNICORNS RARE ACROSS ALL MAJOR REGIONS
IN Q1’16

19. June 2016
Marketoverview
19
NEW UNICORNS RARE ACROSS ALL MAJOR REGIONS
IN Q1’16

20. June 2016
Marketoverview
20
NUMBER OF COMPANIES EXITING FOR LESS THAN THEY
RAISED HAS INCREASED

21. June 2016
Marketoverview
21
~80% OF TECH EXITS ARE < $200 MILLION. IRRATIONAL
VALUATIONS OF LAST 2 YEARS MAKE EXITS CHALLENGING

22. June 2016
Marketoverview
22
PERFORMANCE OF 17 TECH UNICORNS POST-IPO HAS
BEEN TERRIBLE

23. June 2016
Marketoverview
23

24. June 2016
Marketoverview
24

25. June 2016
Marketoverview
25
…AND WHILE TECH MEGA-ROUNDS ARE MUCH LOWER
THAN 2015, STILL WAY ABOVE HISTORICAL LEVELS

26. June 2016
Marketoverview
26
STILL 12 NEW UNICORNS BIRTHED SINCE BEGINNING OF
THE YEAR (MOST IN ASIA AND NOT ALL ARE VC-BACKED)

27. June 2016
Marketoverview
27
AND THERE WILL ALWAYS BE GREAT COMPANIES
CREATED

28. June 2016
Marketoverview
28
LPs ARE STILL BULLISH ON VC AS AN ASSET CLASS

29. June 2016
Marketoverview
29
STILL LOTS OF MONEY OUT THERE ESPECIALLY AS
CORPORATE PARTICIPATION CONTINUES TO GAIN STEAM

30. June 2016
Marketoverview
30
THE MOST ACTIVE CORPORATE VENTURE CAPITAL GROUPS

31. June 2016
Marketoverview
31
THE MOST ACTIVE CORPORATE VENTURE CAPITAL GROUPS

32. June 2016
Marketoverview
32
LOTS OF COMPANIES DISRUPTING MARKETS.
EXAMPLE OF P&G.

33. June 2016
Marketoverview
33
LOTS OF COMPANIES DISRUPTING MARKETS.
EXAMPLE OF P&G.

34. June 2016
Marketoverview
34
AND HERE’S STARWOOD SUFFERING A DEATH BY A
THOUSAND CUTS

35. June 2016
Marketoverview
35
IOT IS ATTACKING LOTS OF SPACES - HEALTHCARE

36. June 2016
Marketoverview
36
INDUSTRIAL IoT

37. June 2016
Marketoverview
37
DAILY DEALS ALSO HAS LOST ITS LUSTER AS WE KNOW

38. June 2016
Marketoverview
38
BIG DATA CONTINUES TO BE POPULAR

39. June 2016
Marketoverview
39
DEAL ACTIVITY TO ARTIFICIAL INTELLIGENCE
CONTINUES TO CLIMB
Funding and deal activity has jumped. This is a very hot area. It’s the new Big Data.

40. June 2016
Marketoverview
40
ARTIFICIAL INTELLIGENCE M&A ALREADY STEPPING UP

41. June 2016
Marketoverview
41
THE BOT BUBBLE?

42. June 2016
Marketoverview
42
REMEMBER WHEN ON-DEMAND WAS ‘THE’ THING?
This was small handful of companies (Uber, Airbnb) which drove up funding totals and a lot of investors
jumped in driven by FOMO.

43. June 2016
Marketoverview
43
A TREND THAT REALLY WASN’T

44. June 2016
Marketoverview
44
MEDIA CHATTER ABOUT SPACE CONTINUES…

45. June 2016
Marketoverview
45
…BUT HAS LOST STEAM RELATIVE TO NEWER HOT AREAS
SUCH AS AUTONOMOUS CARS

46. June 2016
Marketoverview
46
AUTO TECH HEATS UP. CRUISE $1B ACQUISITION IS
SPURRING MORE ACTIVITY.

47. June 2016
Marketoverview
47
AUTO TECH HEATS UP. CRUISE $1B ACQUISITION IS
SPURRING MORE ACTIVITY FROM VCs AND CORPORATES

48. June 2016
Marketoverview
48
AUTO TECH HEATS UP. CRUISE $1B ACQUISITION IS
SPURRING MORE ACTIVITY FROM VCs AND CORPORATES

49. June 2016
Marketoverview
49
DIGITAL HEALTH IS HOT
(ALTHOUGH EXIT ENVIRONMENT REMAINS LUKEWARM)

50. June 2016
Marketoverview
50
MOMENTUM AROUND WEARABLES HAS FLATTENED

51. June 2016
Marketoverview
51
CYBERSECURITY ALSO HOT (BUT OVERFUNDED)

52. June 2016
Marketoverview
52
REAL ESTATE TECH GAINING STEAM

53. June 2016
Marketoverview
53
“ASSET INTENSIVE”

54. June 2016
Marketoverview
54
THE INTERNET OF THINGS REMAINS HOT

55. June 2016
Marketoverview
55
HOW OLD FASHIONED?
UNIT ECONOMICS ARE COOL AGAIN

56. June 2016
Marketoverview
56

57. June 2016
Marketoverview
57
COLLAPSE DIDN’T HAPPEN IN Q1…

58. June 2016
Marketoverview
58
BUT Q3 AND Q4 2016 IS D-DAY – THIS IS WHEN THE MOST
UNICORNS WILL NEED TO RAISE FUNDING

59. June 2016
Russian Venture
Capital market
overview 2015

60. June 2016
Russia’s VC* Market Snapshot 2015
60
Investment
value, $M
Average deal
value, $M
Investor
structureNumber of deals
Seed
Start-up
Growth
Expansion
Total
Exits
Maturity
Marketoverview
NEGATIVE
trends
POSITIVE
trendsCONCLUSION
128 $32.4 M $0.3 M
101 $79.0 M $0.8 M
24 $67.0 M $2.9 M
22 $182.5 M $8.7 M
3 $4.0 M $2.0 M
$364.9 M $2.9 M278
4 $10.9 M
Seed A
B C+
Exit
* - includes only VC Russian deals below $10Min of value

61. June 2016
Knocked-down VC market
Market
overviewNEGATIVEtrends
POSITIVE
trendsCONCLUSION
61
VC market resembles the Russian economy’s negative dynamics
triggered by commodity prices drop, sanctions and media-wars.
As a results, VC funds moved to Asia, US and Europe.

62. June 2016
Startup Failure Post-Mortems
Market
overviewNEGATIVEtrends
POSITIVE
trendsCONCLUSION
62
907
652
890
365
374
356
461
278
-
100
200
300
400
500
-
200
400
600
800
1 000
2012 2013 2014 2015
Investment Value Number of Deals
VC Market dynamics, 2012-2015
$ M #
140
14
135
53
139
59
138 155
32 4
0
40
80
120
160
20142015 20142015 20142015 20142015 20142015
$ M
Funds activity by stage, 2015
Seed Start-up Growth Expansion Maturity
 Investment value decreased
by 58%
 Number of deals dropped
by 40%
 Activity of Funds shrinked
across all stages except the
expansion stage
 Structural crisis between
Russia’s institutional
investors and private
business
Growth !

63. June 2016
Market structure: investors & segments
Market
overviewNEGATIVEtrends
POSITIVE
trendsCONCLUSION
63
- 50,00 100,00 150,00 200,00 250,00 300,00
PPP
Funds
State
Strategic
Business-angels Biotech
Indust. tech
Other tech
Comp. equip
Soft & Internet B2B
Other IT
Soft & Internet B2C
Private funds dominated the market in 2015
Soft & Internet
lead the market
Software & Internet B2B Software & Internet B2C
2014 2015
$122.5 M
$329.5M
Leaders by the fall
E-commerce Education Content providers
2014 2015
$148.4 M $ 131.9 M
-11% -63%
Leaders by the fall
Platform
Enterprise
management systems
Marketing / ads
$ M

64. June 2016
To Break the Wall
Market
overviewPOSITIVEtrends
NEGATIVE
trends
CONCLUSION
64

65. June 2016
POSITIVE trends
Market
overviewPOSITIVEtrends
NEGATIVE
trends
CONCLUSION
65
 Activity in non-IT market is increasing
 New local Funds and Angels appear in
the market
 Many Family Offices direct eyes on VC
investments
 Russian Government continues to
support innovation sectors and links
universities and corporations
 VC-infrastructure has significantly
improved in big cities

66. June 2016
Market
overviewPOSITIVEtrends
NEGATIVE
trends
CONCLUSION
66
Angel investors and Corporations gain traction
3 8
99
10 13
7
17
4 9
2,6
8,5
1,5
14,0 8,1
1,5
60,0
25,2
0
20
40
60
80
100
120
2014 2015 2014 2015 2014 2015 2014 2015 2014 2015
Corporations Angel investors
Seed Start-up Growth Expansion Maturity
ANGELS!
CORPORATIONS!
ANGELS!

67. June 2016
From 2015 to 2016: hopes for finding the oasis soon
Market
overviewCONCLUSION
NEGATIVE
trends
NEGATIVE
trends
67
TRENDS & EXPECTATIONS
 Foundation of new corporate VC funds
 Exits & big rounds: New Russian
unicorns has appeared
 Angel investors’ number is expected to
grow (from 250 to 10 000 in an early
future)
 Focus shifts towards Hardware due to
strong government support
 Export oriented development strategy

68. June 2016
Investors’ choice
Market
overviewCONCLUSION
NEGATIVE
trends
NEGATIVE
trends
68
START-UPS
 Later stage with visible exit path
 Cash positive or close mid stage with ability to
pay dividends
 Early stage with disruptive technology & great
entrepreneur
 Hot techs & verticals:
- Fintech, AdTech, E-commerce, Security
- Big data, AI and B2B tools, P2P/ aggregators

69. Copyright ©2016 RMG partners refers to all related entities. All rights reserved. This report is solely for the use of client personnel. No part of it may be
circulated, quoted, or reproduced for distribution outside of the client organisation without prior written approval by RMG partners.
Arseniy Dabbakh
Managing Partner
T: +7 (495) 668 1300
E: ad@rmg-partners.ru