Moscow-Based Venture Fund Ru-Net to Invest USD50m in SEA Market

I had the privilege to have a chat with Alexander Pavlov, Investment Director for Moscow-Based Venture Fund Ru-Net, on the sidelines of our Startup Asia event. We chatted about Ru-Net’s plans to invest $50 million is the Southeast Asia (SEA) region.

In a nutshell, Ru-Net is a Russian-based fund focused on investing in Internet and Information Technology (IT) industries. Some of the more successful companies that they have invested in include OZON.ru (often dubbed the “Amazon of Russia”), BigLion (Russia’s largest daily deals site) and ivi (an online video site). They also have a completely different fund focused mainly on investing in technology firms in the US, called RTP Ventures.

At present, Ru-Net has $700 million in their fund and is planning to invest $50 million in the SEA market in the next two to three years, depending on the quality of the startups they are able to find. They have already invested in a Vietnamese e-commerce platform called MJ Group and are looking at investing in India next.

Ru-Net hopes to invest around 5 to 20 million dollars in a single transaction, preferably in the areas of e-commerce, online travel, online entertainment, and social gaming, and preferably in startups who have already received some amount of seed funding.

They do not have offices in SEA at the moment though, despite having plans to enter the SEA. I thought that wasn’t exactly wise, but Alex later shared that they do have local partners in SEA. They have invested in Digital Media Partners (DMP) and are currently on board as their limited partner. After all, local partners understand the local markets, have the right connections and comprehend the consumption patterns better than foreign investors.

When asked about Alex’s thoughts on the Startup Arena pitches in Startup Asia, he was pretty excited about the untapped potential in the e-commerce market. In his opinion, there is still room for e-commerce and reveals that they are on the search for people who are able to execute and build companies which are scalable and replicable in different markets.

Previously, RedMart did reveal that the non-perishable goods market generates about $4.2 billion annually in Singapore, so there are definitely areas within the e-commerce industry where startups could possibly explore.