OREANDA-NEWS  There is a huge shortage of money in the Russian venture capital market, over the past two years their volume has collapsed by two orders of magnitude, and the frequency of start—ups has increased tenfold and continues to decrease. This was stated in an interview with RBC by Kirill Varlamov, head of the Foundation for the Development of Internet Initiatives (FRII).

According to him, in 2021 there were peaks in the number of transactions and the size of investments, but then the model broke down. Companies have stopped buying startups, and their main model is now business retention.

Venture investments are investments in risky promising projects, of which only a small number reach the stage of a large company with the help of technical or managerial innovations. In developed countries, this type of investment is considered one of the pillars of innovative development.

As Varlamov noted, startup valuations have fallen critically in Russia, and their owners are no longer going to sell the business. It turns out that there are no more sellers or buyers in the market, which means that its participants are focused only on dividend income.

The problem with this approach is that there are few startups that are able to provide a stable income for several years, the idea itself does not imply a mandatory return in a clear time frame. Accordingly, the market is losing everything it has gained.