The mass digitalization of business has launched an entrepreneurial initiative in the development of IT products and solutions.
During the pandemic, the IT market showed higher dynamics than in the previous few years. In 2020, it increased by 14%, according to IDC. Against the background of the accelerated digitalization of industries and the development of various online services, entrepreneurial initiatives and investments in IT startups have increased. According to the Startup Barometer 2021 survey, 56% of startups in 2020 launched new lines of business.
In the venture capital market, it’s time for startups, notes Alexey Okishev, partner, head of PwC’s digital products center in Russia: “Investors are eager to make profitable deals.”
According to Inc. estimates, in 2020 the volume of public transactions with Russian startups almost doubled to 21.9 billion rubles, and the number of transactions almost by 1.5 times, to 180. According to the estimates of Dsight, a platform for venture investments, in the first half of 2021, investments in Russian startups tripled compared to the same period last year and exceeded $1 billion. In total, 130 deals were made in the first half of the year — 20% more than in the same period in 2020. Entertainment ($250 million), cybersecurity ($250 million), transport and logistics ($116 million) were the leaders in terms of deal volume, while e-commerce segments (18 deals), software development (17 deals), merchandise and services (12) — in the term of transactions.
The attention of investors and entrepreneurs is attracted by the MedTech and EdTech segments that boosted in 2020.
According to the director of acceleration programs of the Information Technology Cluster of the Skolkovo Foundation Anton Pronin, against the backdrop of the growth during the COVID-19 pandemic of online shopping, telemedicine, online education, agricultural technology, digital communication channels, ordering and paying for services, the investment attractiveness of the AgroTech, FinTech, Entertainment, Healthcare, FashionTech and Advertising & Marketing areas has increased. Offline retail needed additional financial and legal services, as well as information security services to work in an online format.
Investors are studying HYIP areas in detail, says Alexey Shamaiko, director of business development programs at Rostelecom PJSC. General topics, such as artificial intelligence (AI), according to him, are implemented in real-world projects in the field of identification and biometrics, situational video analytics, computer vision, and the creation of chat bots.
State support for end-to-end technologies, big data and artificial intelligence has attracted additional investor attention to machine learning technologies, says Alexey Okishev.
According to GenerationS, AI-based solutions in the field of fintech are at the peak of demand. In 2020, customer services in banks evolved — they have become smarter, more comfortable, flexible and 150% customer-oriented, says Ekaterina Petrova, GenerationS Director: “The focus is shifting to projects that can offer innovative solutions and provide competitive advantages.”
According to Ekaterina Petrova, the second popular area in 2021 included solutions in the transport industry, including drones. The technology itself is not new, but it has reached full technical maturity only recently. Drones can ensure monitoring and control, deliver goods from point A to point B, broadcast messages and data.
The limited work and, in some cases, the impossibility of the work of personnel in production have provoked the growth of human-less innovations, that is, without human participation — robotic conveyors with remote control, the use of drones for monitoring and inventory, unmanned logistics, adds Anton Pronin.
According to Dsight, the volume of investments of domestic corporations and corporate funds in startups doubled in the first half of 2021, to $359 million. Based on the Startup Barometer 2021 survey, 84% of startups in Russia work or are going to work with corporations. Interaction with startups helps large players to increase flexibility, quickly test hypotheses and gain access to new promising developments, Ekaterina Petrova notes: “Startups are ready to offer customized solutions, corporations especially appreciate this approach.”
Alexey Okishev says, that among major companies, especially in the IT sector, there is a trend towards the creation of ecosystems and so-called innovation sandboxes: “There is a noticeable number of platforms involving the cultivation of startups that did not exist five years ago.” In parallel, according to him, there is a rethinking of such tools as a corporate accelerator or a venture studio — corporations are looking for new formats to increase the efficiency of working with startups.
Sberbank, Severstal, Rosatom, VTB, Rostelecom, Sibur and other corporations are developing corporate programs and accelerators as a means of searching for innovations. Ekaterina Petrova notes, that most people prefer mature solutions: “However early-stage solutions are not without potential, they just need financial support to help them grow to the level of readiness that customers need.”
So, when selecting teams — winners of the digital accelerator of Sibur and GenerationS launched this spring, solutions of a high degree of readiness were considered that can be quickly finalized to the needs of the company and test the hypothesis about the effectiveness of their application, says the project manager of the Sibur Digital Innovation Center Maria Kirienko. According to her, collaboration with innovators is an important resource for the company's technological development. The company has created an innovation center as a "single window" for interaction with IT startups, venture funds, accelerators and development institutions.
In turn, Rostelecom, for example, is developing R&D clusters for specific areas and digital products using various technologies. “In the Digital Medicine cluster, we form partnerships and acquire the equity of companies involved in image recognition, situational video analytics, BI systems and automatic dispatching of business processes,” Alexey Shamaiko said. The company also invests through equity acquisition and creation of joint ventures with start-ups in projects in the field of cybersecurity, cloud services, education, smart and safe cities.
Experts associate the further development of IT entrepreneurship in Russia with the growing demand for digital solutions from the industrial customer (market pull) and the emergence of new technologies on the market (technology push). Alexey Okishev says that in addition, entrepreneurial activity will stimulate the development of ecosystems: “They make it possible for startups to understand at the initial stage who is the end user and purchaser of the solutions being developed.”