12 things you need to know about Russia’s tech scene

Russia just held its biggest yearly technology and innovation fair, called Open Innovations, in Moscow. Tech in Asia was invited to take a look around. (Disclosure: flight and accomodation was sponsored by them).

Let’s not kid ourselves. A few days in the capital don’t paint a comprehensive picture of Russia’s startup ecosystem. But based on chats with entrepreneurs, VCs, journalists, and tech community builders, we’ve come out with a rough guide to understanding Russia’s tech scene.

1. English-language coverage on Russian tech startups is rare

Why is it we hear so little about Russian tech companies and startups? For one, there isn’t much English-language coverage of these topics. The best gateway to recent industry news is probably East West Digital News. Arcticstartup is another tech blog that occasionally looks at Russia.

A handful of journalists cover the Russian and Baltic tech industry for international tech media, like Andrii Degeler. You’ll find that Mike Butcher, editor-at-large for TechCrunch, occasionally writes about Russia.

2. All roads lead to Skolkovo

Skolkovo innovation center is a gargantuan vision set in motion by the Russian government in 2009, under the brief presidency of Dmitry Medvedev. Skolkovo is a vast territory outside of Moscow and houses startups, tech firms, and even a university called Skoltech. It accepts local and international students and offers master’s programs in biomedical science, product design and advanced manufacturing, IT, energy, and space science. It’s also open to applicants for a Ph.D.

By creating favorable conditions for startups, including tax cuts, easy access to government grants, venture capital, and industry networks, Skolkovo exudes a gravitational pull on young entrepreneurs. Skolkovo now claims to have 1,147 companies representing 49 regions 
of Russia participating in its program. It’s the Russian attempt at kickstarting a Silicon Valley-like innovation epicenter.

Despite doubts about whether such top-down endeavors can lead to a healthy ecosystem, Skolkovo continues to grow. As one of the organizers of the Open Innovations forum, it had an impressive booth in the main exhibition hall, with a daily-changing array of Skolkovo residents showing off their work.

3. Russian Venture Company, a state-owned “fund of funds”

If Skolkovo offers the physical and intellectual space for innovation, Russia Venture Company (RVC) provides the financial fuel to keep it running. The government-owned venture capital firm manages several of its own funds, in addition to joint funds with private investors. The government has authorized about US$450 million for these investments.

“As a government fund, RVC tries to invest where market forces don’t apply,” Oleg Plaksin, RVC’s director of International Projects, told Tech in Asia. “We look at seed investments, and in particular technologies which are still a long way off before they are marketable, such as biotech.”

4. Fifth in the world in VC spending, second in Europe

5. Strength in space, robotics, biotech, healthcare, B2B

6. ‘It’s complicated’ between large tech companies and the government

7. VCs are turning their back on Russia

8. It’s not just the government

9. Yandex, the Russian Google, is also the Russian Uber

10. Russia wants to bring fiber optic broadband to every village

11. Russia is trying to force internet companies to build data centers locally

12. Russia is seeking high-level tech collaborations with Asia

About the Open Innovations Forum