Year in Review: A Look at Russia’s VC Market through 2020

Despite the pandemic, the number of VC transactions in Russia grew from 246 deals in 2019 to 281 deals in 2020, totaling $702.9 million. In our latest report, Venture Russia 2020 Results, we partnered with Crunchbase to analyze the Russian and global VC markets throughout 2020.

Russian VC activity in 2020

The Russian VC market experienced а significant downfall in the first half of 2020 that left investors worried. Because quarantine measures in Russia were lifted in mid-July, the majority of the VC activity occurred in the second half of the year and managed to beat all expectations.

The overall venture capital investment in Russian startups totaled $702.9 million last year, a decrease of 21 percent from 2019. However, this result could be explained by the unpredictable economic environment of the pandemic and many deciding to minimize their risks. 

Russian investor behavior during the pandemic

One major change we noticed in investors’ behavior during the pandemic was a significant reduction in accelerator investing. In 2019, accelerators amounted to almost 30 percent of all venture deals, and in 2020 their presence amounted to less than 15 percent. The hole created by accelerators was picked up by business angels who conducted 64 deals for a total volume of $37.3 million. Dmitry Voloshin was the most active Russian angel investor with five investments. 

While some investors took precautions, others saw opportunity. We noticed this trend especially in corporate investors, which invested $308 million over 47 deals. Megafon, a Russian telecom provider, invested $104 million in video-streaming service START, marking its first investment since 2018. Mail.ru Group led the investor category with seven deals. The company primarily invested in edtech startups Uchi.ru, SkillFactory, Tetrika and Skillbox for a total of $57.2 million. 

The average check amount from investors fell by 30 percent, primarily due to two types of investors: private funds and international investors. One theory for the drawback of international funds is that investors decided to focus on their existing portfolios in domestic markets. The average private fund checks decreased by almost 50 percent since most investments went toward earlier-stage startups, which generally require less cash in their funding rounds. 

The Russian government followed the trend of minimizing risk and decreased its investment activity by 10 percent, to $72 million. 

New investment sectors

Looking at the global market, the pandemic opened up potential in previously overlooked industries. Obvious areas of opportunity that became apparent in 2020 include education, entertainment and remote-work technologies. The Russian market saw a rise in funding in these areas, along with other new industries.  

One of the new industries is agrotech and startups disrupting the agriculture ecosystem. The number of industry deals in 2020 doubled when compared to 2018 and 2019 combined. A total of $16 million was invested into nine Russian agrotech startups. The industry is in its early stage with 80 percent of investments going to companies in early-stage rounds. 

The Russian VC market beat all expectations through 2020’s economic instability. As 2021 continues, we expect the market to continue growing with the emergence of new industries and technologies. 


The Report was made with the support of Crunchbase, Kaspersky Lab, DS Law, Raiffeisen Bank, Moscow Agency of Innovations, EY and NAIMA.