International investors reveal their favourite trends of 2016 – and tell which Russian startups we should follow.


We interviewed three investors about international trends and the Russian market development Photo: Shutterstock

The label of “something ventured” is very likely to make a unique startup’s story be heard in the tech world and strengthen the startup’s intent on winning customers’ loyalty and market recognition. The irony of it all is that “selling customers is easy, selling investors is not”, as Richard Branson simply debunks the myth of easy money flows surrounding a startup society.

Some data even show that 99.997% of entrepreneurs should hesitate to accept venture capital if they get an offer from a VC fund, accentuating on the fact that in startup industry total write off stories happen too often and only a few ones build a home run.

However, VC has already beaten the market in 2015 with venture capital funding made an 11% jump in the first three quarters compared to all of 2014, deals continued to increase, unicorns showed steady rising and Asia proved to be a perspective place to launch a business in. With extreme of trepidation startups keeps diving into the venture capital phase willing to swiftly get into a maturity level, make a fortune and benefit the society.

The paradox of VC has been well established in USA, Europe and Asia, but wrestles with the quirks of the Russian mind. Russia is perceived (partly reasonably) as a place where the work of innovation is slow and cumbersome. Even the trends show that the Russian venture capital market decreased sharply in 2015 (currency fluctuations, sanctions and other burdens put the reality into a “no-frills” context). Yet, an apparent puzzle may be overcome, since the infrastructure here is gradually evolving (a newly-born platform StartTrack meant to be more than a simple meeting point for investors, VCs and startups definitely creates positive thoughts about the future). To be perfectly frank, the «going global» strategy now looks even more appealing than ever.


Venture market in Q3 of 2015.

73% of deals in Russia went to Internet firms in 2015, while Healthcare, Business and Finance industries won the VC’s attention in Europe. But 2016 may be the year for breaking the rules and rewriting the trends. Fintech, Big Data, eCommerce and IoT are already considered to be the industries ept for getting VC in 2016.

We asked 3 experts about interesting cases and new trends facing startups in 2016. Their professional background in the international VC firms that operate on different markets, including the hardest one – Russia – made the answers incisive and entertaining.

Here are the 5 simple questions we asked them:

What’s your favorite deal in 2015 and why?

Name some Russian startups that may interest international investors

What technologies will be popular in 2016? And what do you expect from the tech sector in 2016?

What are the tech trends in 2015 that you liked most of all?

What about the Russian venture market: are there any positive trends?

1. What’s your favorite deal in 2015 and why?

I would highlight MONI’s public launch and its pilot project with Finland’s government as a favorite in 2015. The Finnish Immigration Service has chosen MONI for its pilot program to provide refugees with both MONI prepaid Mastercards and payment accounts. The pilot project is a good example of how hi-tech solutions can help overcome one of the biggest challenges the EU faces nowadays.

2. Name some Russian startups that may interest international investors

I noticed 2 companies making the mark in the B2B transaction.

NFware develops virtualized network software for telecom operators and data centers to help them build more flexible and efficient networks. The company has already made impressive progress in Russia as well as in Europe. Good traction was achieved in part because NFware was valued by Telefonica. The telecom giant made investments in the project earlier this year.

Healthprint.io produces software for 3D printed creations for clinical applications. With this software, medical professionals from all over the world can take advantage of 3D printing for better patient treatment. In 2015, the company was marked as one of the Europe’s hottest startups by Wired magazine. It is hard to imagine, but thanks to their tools, eight bone grafting and joint replacement surgeries have already been performed in 2015. Besides the tech that helps to create human bio implants, Healthprint.io offers clinics individual thermoformable splints.

3. What technologies will be popular in 2016? And what do expect from the tech sector in 2016?

I believe in the emerging cross-industrial projects trend. In 2016, I expect new tech projects will appear at the edge of the online and offline crossroads. I already see this happening in areas like agrotech, fintech, insuretech, energytech, and some others verticals.

4. What are the tech trends in 2015 that you liked most of all?

Messengers as platforms, software as infrastructure, and further “Uberisation” are trends that became solid streams for new projects in 2015.

5. What about the Russian venture market: are there any positive trends?

Despite the fact that the Russian venture market declined in 2015 by 25-30%, there were also good things that happened. The important trend we saw was the internationalization of the Russian venture market. Due to negative economic effects, many companies have gone over to the European market — in fact, the second place at SLUSH this year was gained by a Russian company. But the downturn has also meant the valuation of many Russian startups has dropped enough to make them more attractive to many investors. And Russia’s top-notch specialists are still the best in programming according to the results of the ACM International Collegiate Programming Contest 2015.

1. Your favorite deal in 2015 and why?

To put it briefly, Mercaux. The company provides an in-store technology solution for fashion retailers, thus increasing in-store sales by 7-11%, improving customer experience and streamlining business processes. They are performing well globally.

2. Name some Russian startups that may interest international investors

4 good cases came up to my mind:

Noosphere.today – an activity tracker for your skills and knowledge (try out Elon Musk’s Noosphere all sides of knowledge and experience. Look like veterinary and agriculture have not interested him much).

ELEMENTAREE – a service that pro
vides its customer with ingredients, recipes and ideas to master their chef’s zeal and keep them in a good shape

ParkApp – fast, cheap and safe parking (if you fancy travelling to Moscow, keep in mind that every 35 seconds a parking spot becomes vacant here, so you’d better be app-equipped).

3Plet – a platform that lets musicians turn their albums into mobile apps and distribute them worldwide.

3. What technologies will be popular in 2016? And what do you expect from the tech sector in 2016?

I believe that 2016 will be the year of conservative industries (with the long cycle for innovations) to meet and implement new technologies and innovations. Retail, financial sector, medicine, education and other industries will try to implement their tech and digital strategies and we will have a chance to jump into the passing train together with them

4. The tech trends in 2015 you liked most of all

My favorite trend is “Uberization” – such a good opportunity to get rid of intermediaries in the chain. In every industry (cleaning, delivery, rent, laundry, and so on) you can use this scheme to make new marketplaces in various industries.

5. Russian venture market: are there any positive trends?

The instability and uncertainty in Russian economy will continue at least 2-3 years. Honestly, the startup companies basically have lost an access to financing – especially on the seed or pre-seed stages. On the other hand, the number of high quality ideas and daring founders (Russia still keeps a high level of technical education) is greater than ever.

It’s also interesting that the Russian market lags behind the international markets in terms of tech development and innovations, it is a good platform to test the concept and get the first metrics that will allow the project to scale globally. Another reason why I would strongly recommend for international investors to look closely on Russian startups is a good opportunity to receive the essential discount on valuation due to difficulties in obtaining financing in the domestic market.

1. Your favorite deal in 2015 and why?

Undoubtedly, IPO Square. First of all, everything was done smoothly (the investors harvested a good sum of profits out of the IPO decision) and, secondly, it has opened up opportunities for other fintech (mPOS) startups for M&A deals.

2. Name some Russian startups that may interest international investors

Tochka (in English “Point”) – online-bank for SMEs.

And Knopka (in English “Button”) – an Online Accounting for SMEs (serves as a “Mint for SMEs”). It has been chosen as one of TOP100 hottest startups by Wired magazine.

3. What technologies will be popular in 2016? And what do you expect from the tech sector in 2016?

Blockchain will get a lot of PR attention, while O2O will make real achievements in 2016.

4. The tech trends in 2015 you liked most of all

The Fintech as an industry has evolved significantly for only 1 year period. Now it’s the most appealing industry in the tech world. Fintech news are updated every week – a remarkable pace for a newcomer!

5. Russian venture market: are there any positive trends?

Due to currency fluctuations, outsourcing brainy Russian IT specialists sounds to be a good news for companies throughout the world. To put it simply, the Russian market is pretty good, there are interesting teams and ideas, but the political factors will hamper the VC growth.

Comments

comments

Optimization WordPress Plugins & Solutions by W3 EDGE