Photo: Interros press service
Voskhod, the Interros venture fund, celebrated its birthday at the Eastern Economic Forum. What has been achieved during this time and why the company is investing in the unusual field of deep technologies, Voskhod venture partner Artur Martirosov said.
The investor is looking for something deeper – to paraphrase a well-known saying, many venture funds are trying to act on this principle today. Investments in DeepTech around the world are consistently high.
Let us explain what we are talking about. Venture is an investment in risky projects (usually in young companies – startups), which in the future can bring good profits and returns to the investor. And DeepTech is deep technology. This term usually refers to companies that use their own scientific and engineering developments to create a commercial product, often without analogues (more about DeepTech – in the “Our Help” section).
Every fifth venture deal in Russia in 2022 and in January-July 2023 took place with startups in the field of DeepTech, experts from the Voskhod Venture Fund, the Moscow Innovation Agency and the Interros Group calculated as part of a joint study of investment activity in deep technologies.
– If we talk about the global trend, investments in DeepTech are gaining momentum. 2022 is not very indicative due to certain global changes, including in the economy. But if we take the trends of 2020 and 2021, the total investments in deep technologies in the world amounted to 60 and about 90 billion dollars. And the capitalization of all DeepTech companies at the end of 2021 amounted to about half a trillion dollars. And this figure is constantly growing,” Artur Martirosov, partner at the Voskhod venture fund, told us.
This conversation took place in the Interros lounge at the Eastern Economic Forum 2023. The Interros holding company is a key investor in the Voskhod venture fund.
By the way, the Voskhod Foundation celebrated its birthday at VEF. In honor of this, Arthur Martirosov held a small “presentation” of the foundation for the guests.
– We have a young fund, the agreement on its creation was signed at the Eastern Economic Forum in September 2021. In fact, the fund started working in December 2021. We wanted to invest specifically in DeepTech. After all, this is an opportunity to find unique projects with unique technologies. If they can go through the “valley of death” – the stage of bringing a product to the market and its monetization – then after that there is a high probability that such a project will be, if not the only one of its kind, then probably one of the few, – explained the choice vector Martirosov. – This is typical for DeepTech in many areas – it doesn’t matter whether it’s robotics, biotechnology or medical technology. And our task is to find such a team, support it, draw a risk map, understand how we can correctly approach its further development and commercialization from an investment and business point of view, and also help with market entry and capitalization.
Voskhod selects DeepTech projects with global prospects.
– We support Russian founders (founders of companies – Ed.) who do global business. And this is also a distinctive feature of our fund. Although we invest in our country, we do not focus exclusively on Russia. Each of our projects either at the time of our investment in it was already taking the first steps of its foreign activity, or we clearly understood how, with the help of our investments, they could go abroad and achieve certain successes,” says Artur Martirosov.
In the fund, among the team there is a clear division of expertise in different areas of technology.
– We have a small team, but each of us is very focused on our topic. For example, at the fund I am responsible for biotechnology, medicine, and robotics. Other people are responsible for space, for IT. This gives us the opportunity to work professionally in various fields,” Martirosov noted.
WHERE AND HOW MUCH DID YOU INVEST?
– Over the past year and part of this year, we have made quite a large number of investments. Invested more than 2 billion rubles in 14 companies. This is a good pace in today’s market,” says Artur Martirosov. – Interros invested 10 billion rubles in the fund, and we successfully invested a fifth of this money.
Voskhod’s portfolio includes companies from a variety of fields:
– These are developers in such areas of deep technologies as new mobility, drones, space technologies, fine chemistry, biotechnology, medicine, etc. We also invested in food tech (food technology – Ed.). We have conveyor solutions – for example, electric centrifugal pumps for the oil industry, for complex drilling. Space technologies and unmanned vehicles are very promising areas. This is a very interesting time for the market. The market is ready, it is ripe. There was a series of failures. There were a certain number of startups in Russia that either went bankrupt or went the wrong way. And we can digitize their path and understand what not to do. We have the opportunity to analyze other people’s negative experiences. This saves time and money,” explains Artur Martirosov.
Space is a strategic direction for the country as well. Now the state (and not only ours) is actively expressing its readiness for dialogue with private space companies. Everyone is hearing about Elon Musk’s SpaceX and other non-governmental organizations in this area. It seems that there is a tendency to put space exploration into private hands.
There are private space companies in Russia too. Voskhod invested in two of them. Again, with an eye to foreign markets in the future.
“We look globally and clearly understand how such a company can compete in its priority markets,” says Martirosov. “We also see how in the future, in correlation with the state, we will be able to bring the product to the stage where it will be in demand and companies will have orders. We have the ability to quickly assemble engineering teams, “mix” them, solve technological problems and bring products to market. We chose space, we believe in it and clearly understand how we can occupy a strong niche in this market over the next five years. At a minimum, this is leadership in Russia; at a maximum, we want to become full-fledged participants in the global market.
TO THE EAST!
– It’s not just that we meet with you in Vladivostok, where our foundation is registered. An important part of our work is supporting Far Eastern projects. This is another promising and important direction for us,” says Martirosov.
Currently, the fund’s portfolio includes four Far Eastern companies.
– For example, last year we invested in a company that creates artificial intelligence for recognizing images – head, lungs… What’s interesting is that its founders are experts from different fields, this is one of the distinctive features of DeepTech. On the one hand, the team has a “medical” founder who has worked in the healthcare system for more than 20 years. On the other hand, there is a second founder – a programmer with extensive work experience. The company is showing good results, we invested in it at an early stage. To date, sales have already been activated, the company has been successfully included in the Moscow experiment, a pilot project has been carried out with the Medical-Surgical Center named after. I. N. Pirogov just based on photographs of the head. And very good results were shown: accuracy of 99%, sensitivity coefficient of 98 out of 100,” Arthur Martirosov lists, not without pride.
Another key area in which Voskhod operates is biotechnology. The company invested in them this year.
– This is a very promising story for us. We have known the company in which we invested for several years. This is an early investment and has no sales, but the team has been working on this story for five years. We clearly understood that the moment would come when they would be ready to give us an intermediate result. And it will be enough for our team so that we can approve this investment,” says Martirosov.
The company, by the way, is creating truly revolutionary technology. She makes artificial healing skin.
– It is based on a collagen substrate; human red blood cells are also used with a solution to expand them. Moreover, the result is not a product of cellular technologies. This allows you to register, in fact, a medical product without applying the law on cell technologies,” explains Artur Martirosov.
“WE BELIEVE IN THIS MARKET”
And one more important direction (this time not DeepTech) in which the Voskhod fund operates is the IT industry.
“I don’t really like this word, but I would sum these things up as import substitution,” Martirosov smiles. – Firstly, we invested in a full-cycle design bureau, including engineering design and prototyping. And our colleagues are showing quite good results. We clearly understand that we need this investment for several reasons. Firstly, due to the fact that there is a strong team there, and they already have projects that can be brought to market. Secondly, we use them as a kind of examination. When we can bring them a fairly early stage of the product, and they can take it apart “piece by piece” and give their conclusion.
There are other interesting projects. By the way, Far Eastern. For example, Voskhod invested in two startups from the Sakhalin region. This is an IT solution for tourism and a VR (virtual reality) based simulator. Also in the early stages.
– We really liked the founders, we believe in the team, we liked the product that they have today. We understand how they can improve it with our investment, and we believe in this market, which is now free. Therefore, in the case of these investments, we clearly understand what niche these products will occupy.
“It inspires me every day.”
“We believe in DeepTech, and we want more people to know about this direction,” Artem Martirosov said at the end of the meeting.
And he spoke about this unusual area in a little more detail.
– DeepTech has several key features. The first is always a serious scientific base and innovation. The second is interdisciplinarity, that is, DeepTech often works at the intersection of different areas: IT, physics, chemistry… The third feature is that most often (though not always) the result is a physical object that can be touched, and not a software product. According to global research, more than 83% of DeepTech products are just things that can be touched. And the last feature is that such projects solve global problems. In principle, they are aimed at either transforming the usual way of life in their industry, or creating new directions. And this is probably what inspires me personally every day to do what I do. For example, our solution was able to detect cerebral ischemia; we saved several people, and without our decision the doctor would have made a mistake.
$79.5 million – the amount of venture investments in DeepTech projects in Russia in January-July 2023.
The growth was 15% compared to the same period in 2022.
$2.1 million is the average investment in one DeepTech project in 2022.
Today, 19% is the share of investments in DeepTech in Russia in the total volume of venture investments. Five years ago it was 8%.
46.1% of all investments in Russian venture capital from 2017 to July 2023 were in life sciences (biotechnology, medicine, etc.). This is the most popular DeepTech destination in the country.
17.5% of all investments in Russian DeepTech since 2017 fell on robotics and sensors.
12.7% of investments are in artificial intelligence.