During Slush, more than 10 European startups expressed the desire to move to Russia. Source: Press photo
In 2014 more than 50 Russian startups attended Slush, the hippest IT event of the season in Helsinki from November 18-19. Traditionally, 28 companies have represented Russia’s strong IT sector at the Finnish event. However, this time eight nuclear startups, four biomedical startups, two energy startups, and even eight space startups traveled to Russia’s neighbor for the event. The majority of the companies were looking for financing. According to experts, ever-larger numbers of interesting projects have been popping up in Russia amid a shortage of venture investment.
During Slush, more than 10 European startups expressed the desire to move to Russia to take advantage of opportunities afforded by the Skolkovo Innovation Center to test and commercialize their ideas. Among the interested companies were Finnish video startup Videoly and education portal Jamk.fi. For foreign startups, this is a chance to gain an advantage when entering the international market; for example, a medical device can be registered twice as fast in Russia as it can in the United States.
Russians sell their brand at Slush
The latest developments in the Russian startup environment are in line with worldwide trends. Whereas IT companies were previously in demand on the high-tech market, there currently is a growing interest in ideas “at the intersection of technology.” It is simply a question of whether such companies will find investors in Russia.
The Slush exhibition was held in Helsinki in November 18-19. Source: Press Photo
However, foreign companies could also satisfy startups’ need for financing. For example, during the event, Finnish investment bank Evli demonstrated interest in working with innovative companies that are residents of Skolkovo, which is being referred to as the “Russian Silicon Valley” with ever-greater frequency.
“We have a shortage of venture investment, even though two years ago our investors were running around the market screaming that there weren’t any good projects,” Senior Vice President of the Skolkovo Foundation Vasily Belov said. “Now there are projects but no money.”
Many companies that presented at Slush have already proven themselves. For example, Dauria Aerospace, which specializes in developments in the private space sector, has already launched two satellites. However, the company’s founder Mikhail Kokorin said during a presentation at Slush that Dauria Aerospace plans to have up to 20 satellites in the next few years.
What does the future hold for technology?
According to Belov, investors got a taste for industrial and biomedical startups. “According to my estimates, the most interesting things are going to happen in the technologies that will change our lives in the next 10 years. Those include new materials, biomedicine, life science, and anti-aging,” Belov said.
More than 50 Russian startups attended Slush. Source: Press Photo
Sergei Balandin, director of the FRUCT Open Innovation Association, which showcased mobile apps and cloud services for early diagnostics at Slush, said that the cost of such products is quite low for the mass market.
“At Slush we presented a group of apps that make it simple to monitor health,” Balandin said. “We already have more than half a million users. Our Blood Pressure Diary app is in the top three on Google Play among blood pressure gauges. For example, to take an EKG (electrocardiogram) we offer a small device that hooks up to your phone and costs under $20. We don’t currently have assembly line production for it, so it could potentially be even cheaper,” he said. According to Balandin, the accuracy of an EKG measured with FRUCT’s device differs just 10-15 percent from professional equipment.
Anastasia Pukalova is a project manager at reMotion, a company that developed a contactless call button for paralyzed patients that is operated by the eyes. According to her, the idea came from a Russian clinic.
“We thought we could do something useful using popular eye tracking technology. We went to one Moscow clinic with the idea of typing using the eyes, but they said they had other needs. Russia did not have call buttons for paralyzed people, so we decided to make them,” Pukalova told RBTH. Now the Neurology Research Center at the Russian Academy of Medical Sciences is interested in the project.
Why should foreign startups come to Russia?
Skolkovo presented its own new program called Soft Landing for foreign startups at Slush. “Its goal is to, on the one hand, help Russia become part of the international community and, on the other, support foreign companies that want to “land” here and enter the Russian market,” Renat Batyrov, the head of Skolkovo industrial park, told RBTH.
Foreign startups can get support at every stage, from help with translations and market analysis to introductions with potential clients. But what most attracts companies is the opportunity to test out their ideas before taking them to the international market.
For example, experts say that it is two times faster to register a medical device in Russia than in the U.S. – around nine months. This means that by the time the device is registered on the American market, the startup has already generated results and gotten feedback from doctors and patients.
Besides Videoly and Jamk.fi, innovative goods delivery service PiggyBaggy, cloud storage service Sync Cloud, guitar learning portal Musopia, alternative energy company LNG Trainer, and many other startups have expressed interest in moving to Russia.
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