An economic crisis and Western sanctions are prompting funds to seek better opportunities overseas.
Moscow—Russian venture-capital funds are shifting their gaze to outside the country, contributing to an exodus of capital amid an economic crisis and Western sanctions.
A robust startup scene emerged in Russia after the collapse of the Soviet Union, and venture-capital funds followed closely behind. New companies sprung from the scientific and academic communities Russia nourished during the Cold War, including Doroga TV, a vehicle-tracking GPS service, and Kuznech, an app that allows customers to shop by browsing online images. But funding is now looking for better opportunities outside Russia.
Many funds are opening offices abroad or focusing on foreign companies. Moscow-based venture-capital fund Maxfield Capital, for instance, opened offices in Tel Aviv, London and New York earlier this year.
Some VC firms are choosing to leave Russia altogether, saying the country doesn’t allow entrepreneurship to thrive.
“It is just morally hard to be in a depressing atmosphere, with a very aggressive state…pushing the society to reject anybody who thinks differently,” said Vladislav Solodkiy, managing partner at Life.Sreda VC, a Russian fund that moved to Singapore from Moscow about a year ago.