Country Guide

Russia

Russia
Vladislav Zdorenko

Guest Editor

Vladislav Zdorenko

CEO at Startupbootcamp Russia

Vladislav Zdorenko is a co-founder of the technology entrepreneurship development company Startech.vc, CEO of Startupbootcamp Russia, a venture investor and ideologist of the development of an innovation ecosystem in Russia. In 2018, Vladislav and his partner Oleg Linnikov founded the MIPT accelerator Phystech.Start, which takes place twice a year. In 2020, Startupbootcamp Russia, in partnership with Microsoft and EY, launched the Global Pilots program to launch pilot projects in the global market. Vladislav focuses on investing in companies across industry entertainment, game, biotech, AR/VR.


Guest editors are local ecosystem leaders: successful founders, investors, or thought leaders. Have someone in mind? Nominate a country guest editor.

Disclaimer: all content within the Startup Ecosystem Summary and Editor’s Guide sections is written by and reflects the personal perspective of the guest editor. The guest editor is not responsible for content within the Country Snapshot and Community sections, as much of this content is compiled from external sources and does not necessarily reflect the guest editor’s view.

Startup ecosystem summary

Key Startup Cities

Moscow, Saint Petersburg, Kazan

Connected Country Ecosystems

USA, China

Differentiators

  • Cheap and qualified specialists
  • A large network of experienced tech alumni and mentors
  • Productive and creative founders

Challenges

  • Lack of venture investors and funds (domestic and foreign)
  • Small consumer population
  • Lack of business support instruments

Editor's Guide

Introduction

Russia has always been well-known for its advanced technologies and high-quality engineers. Most large multi-national technology companies have Russian developers and programmers. The wealth of senior tech talent has driven the development of the Russian startup community. Today, this community is more active than ever before, as more experienced talent transitions to starting their own businesses. This is further supported by the rise of educational programs surrounding entrepreneurship corporations looking to partner with early-stage projects, and finally the emergence of venture studios. Importantly, many of the startups emerging in this next wave of innovation adopt an international mindset from the beginning, rather than focusing only on the domestic consumer population.

Outlook

The main obstacle for continued ecosystem growth is the lack of investment capital. For the most part, international funds do not have operations in Russia. Many Russian private funds operate in Luxembourg, Ireland and other countries, choosing to focus primarily on investing in the US market. Additionally, Russian enterprises have started to use international scouting to work with the world’s best startups, but few of these companies have acquired local startups, resulting in a relatively small number of exits.

The focus of Russian investment on other markets rather than the local ecosystem means that the success of Russia’s startup ecosystem is dependent on accessing foreign capital. Therefore, it’s crucial for Russian startups to quickly enter international markets and attract investment from international venture players. The challenge in doing so is the geopolitical position of Russia.

Featured Tech Startups

Editor’s choice of the country’s top 10 emerging tech startups.

Startup Showcase

Editor’s pick of which ‘Featured Startup’ is especially worth following and why.

Amixr is an incident management platform. It offers a precisely defined recipient and delivery channel with a unique UX that results in up to a 12x drop in median time to repair and avoids engineering burnout. The co-founders have extensive technology experience in both Russia and the US. They previously worked at Cisco, but decided to create their own startup to solve a core issue for devops developers. Amixr was the only startup from Russia that completed the 500 Startups acceleration program in 2020. Before joining 500 Startups, they raised an early-stage round of US$500,000.

Focus Industries

Editor’s choice of the industries with the most potential for technology disruption and growth.

FintechAt the beginning of the 2000s, Russia lagged far behind international fintech trends, but this enabled it to leapfrog other countries by introducing new technologies earlier than most others. For example, Raiffeisenbank, an international banking group, developed and launched its innovative fintech solutions in Russia before expanding them to other regions.
HealthtechSince the time of the Soviet Union, a lot of money has been spent in the development of the biotechnology sphere. Russia has strong educational/research institutions focused on healthcare and the cultivation of healthcare specialists.
ITIn Russia, IT specialists have higher salaries than the average person, but still make much less than developers in other countries. Taking advantage of this dynamic, many Russian founders raise large rounds from international funds, but spend much less money than their international competitors on talent. The popularity оf IT continues to grow among the young population and IT educational resources are more available than ever before.

Talent

Editor’s perspective of the maturity level of talent in the ecosystem.

  • Technical TalentAdvanced
  • Marketing TalentUndeveloped
  • Experienced TalentModerate
  • International TalentUndeveloped

Culture and History

Editor’s commentary on how the country’s culture and history have impacted the ecosystem.

Russia has a large population, but because of the political environment, there is a small middle class. As a result, it is quite difficult to develop B2C startups, and venture capital investments from local funds/business angels are mainly received by companies setting up a legal entity in other jurisdictions. On the other hand, there is a precedent for large-scale startup success: internet giant Yandex remains the leading local search engines, and also acquired Uber’s operations in Russia in 2017.

Interested in becoming more involved in this ecosystem and connecting with local ecosystem leaders? Let us know.

Community

Active Investors
There’s more to be discovered! Help us showcase this startup community by adding information.
incubators

HSE INC (Moscow): We are HSE INC - Business Incubator of the Higher School of Economics. Our mission is to increase the number of entrepreneurs. We want to change the world through entrepreneurship.

accelerators

IIDF Accelerator (Moscow): The IIDF Accelerator is the best program in Russia for accelerating business development on the Internet. The program includes consulting, educational, marketing and legal support for the Fund, access to more than 250 best market experts, an individual tracker, as well as work with other successful teams in an excellent office in the center of Moscow.

Startups Raising Capital
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Startups Hiring
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conferences

EMERGE (Virtual)

meetups
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Government Programs

Innovation Agency of Moscow: We help technology businesses refine and bring new products to market. We find teams for large business to solve technological problems. We test and implement innovative solutions in the city.

Moscow Innovation Cluster: A platform for the introduction of innovation and the development of cooperation between large corporations, industry, SMEs, educational and scientific organizations, development institutions and the city.

Skolkovo Innovation Center: The Skolkovo Innovation Center is a high technology business area at Mozhaysky District in Moscow.

Non-Government Organizations
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Reports & Infographics
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Country Snapshot

Economy

Startup funding
Startup funding
US$337 million (2020)
Standard of living
Standard of living
Global rank: 50
Innovation
Innovation
Global rank: 47 (2020)
Entrepreneurship
Entrepreneurship
Global rank: 78 (2018)
Annual GDP growth
Annual GDP growth
1.3% (2019)
(Global avg. 3.0%)
Ease of doing business
Ease of doing business
Global rank: 28 (2019)
Ease of starting a business
Ease of starting a business
Global rank: 40
Research and development
Research and development
1.0% of GDP
(Global avg. 2.3%)
Contract enforcement
Contract enforcement
Global rank: 21

Sources

Startup Funding: Dealroom
STANDARD OF LIVING: International Monetary Fund - GDP per capita (PPP)
INNOVATION: Global Innovation Index
ENTREPRENEURSHIP: Global Entrepreneurship Index
ANNUAL GDP GROWTH: World Bank
EASE OF DOING BUSINESS: World Bank
EASE OF STARTING A BUSINESS: World Bank
RESEARCH AND DEVELOPMENT: World Bank
CONTRACT ENFORCEMENT: World Bank

*Updated with latest available data based on listed source.

Society

Population
Population
145.9 million (2020)
Government
Government
Semi-Presidential Federation
Stability
Stability
Global rank: 75 (2020)
Internet usage
Internet usage
82.6% (2019)
Smartphone usage
Smartphone usage
66.3% (2019)
Literacy
Literacy
99% (2018)
Population under 15
Population under 15
18% (2019)
Median age
Median age
39.6 (2018)

Sources

POPULATION: Worldometer
GOVERNMENT: The World Factbook
STABILITY: Global Innovation Index
INTERNET USAGE: International Telecommunications Union
SMARTPHONE USAGE: Newzoo
LITERACY: World Bank
POPULATION UNDER 15: World Bank
MEDIAN AGE: The World Factbook

*Updated with latest available data based on listed source.

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