Gazprom Neft, Gazprombank, the Russian Venture Company (RVC) and VEB Innovation have established a venture fund, “New Industry Ventures”, focussing on investments in technology companies specialising in developing new materials, technologies, products and services for the oil and gas, petrochemicals, and energy industries, including alternative energy.
The New Industry Ventures fund is being established to stimulate the promotion of high-tech products on the Russian market and to support innovative companies and start-ups crucial to the development of Russia’s oil and gas, fuel and energy and wider industries. The fund’s activities will prioritise developing technologies for the exploration, production, processing, transportation, distribution and utilisation of hydrocarbons, as well as energy transmission and storage, the implementation of innovative solutions for industrial infrastructure construction, management of major projects, and so on. Its investment focus will also include resource-management and energy-saving technologies, as well as digital products including Industry 4.0 technologies.
New Industry Ventures has an initial funding target of RUB4 billion, which may be increased in the future, at the agreement of the parties. Its initial period of activity has been confirmed at seven years, again subject to potential extension by agreement of the parties. The fund will be managed by a specially created investment partnership management company, with an independent team of professional market players experienced in venture capital investments and specialising in technology.
Vadim Yakovlev, First Deputy CEO, Gazprom Neft commented: “Put in place at Gazprom Neft’s initiative, this venture fund is focussed on supporting innovative companies. We are expecting solutions with the capacity to change not just the oil and gas, but other industries. This project involves us combining resources with our partners — Gazprombank, the RVC and VEB Innovation — in technology, finance, and managerial expertise. Products developed with the fund’s support will be deployed in pursuing strategies for the technological development of our company, and will be made available to all market players.”Vadim Yakovlev First Deputy CEO, Gazprom Neft
“Gazprombank has, traditionally, always paid considerable attention to the development of high-tech companies, as well as being one of the recognised leaders in working with oil and gas businesses and industrial assets, both as a financial partner and creditor,” commented Alexander Stepanov, Deputy Chairman of the Board. “I am confident that by combining these components this new fund will allow us and our partners to create a pool of promising companies, and ensure their dynamic development in the interests of industries of strategic importance to the country.”
Alexey Basov, Investment Director, RVC, commented: “The New Industry Ventures fund is a unique example of a venture fund established through the joint efforts of an industrial partner, a state bank and two development institutions. It is also the first corporate fund created under the investment strategy announced by the RVC last year. We are keen to scale-up this experience further, offering corporate partners financial leverage and expertise in fund structuring and management.”Alexey Basov Investment Director, RVC
Oleg Teplov, CEO, VEB Innovation, commented: “The involvement of major industry partners such as Gazprom Neft and Gazprombank will ensure this fund has a high level of expertise in the oil and gas industry. This new entity’s work will be directed at financing new technologies with commercial appeal for both the oil industry and other sectors — that is, in acting as cross-functional technologies, as well as facilitating digitisation in a crucially important industry. The fund will also help reduce dependence on imported technologies, as well as promoting exports of Russian solutions, since this is a global industry. We’re hoping that our partnership through the New Industry Ventures fund will allow us to test this format in collaborating with major industry players and financial institutions, and use this experience successfully in the future in developing venture-finance investments in other industries.”Oleg Teplov CEO, VEB Innovation
Gazprom Neft is a vertically integrated oil company, primarily involved in oil and gas exploration and production, refining, and the production and sale of oil products. Gazprom Neft’s corporate structure comprises more than 70 production, refining and sales subsidiaries throughout Russia, the CIS, and abroad.
Gazprom Neft is one of the world’s Top-10 public companies by proven liquid hydrocarbon reserves, and a global leader in its rapidity in reserves replacement. In terms of production and refining volumes it stands among the top three largest companies in Russia. Total production in 2018 reached 92.9 million tonnes of oil equivalent (mtoe), with refining volumes of 42.9 million tonnes.
Net profit at Gazprom Neft reached RUB376.7 billion in 2018, a
Gazprombank (Joint Stock Company) is one of the largest universal financial institutions in Russia, providing a wide range of banking, financial and investment products and services to corporate and private customers, financial institutions, and institutional and private investors. The bank is one of the three largest in Russia by all major indicators and ranks third in the list of banks in Central and Eastern Europe in terms of equity.
The bank provides services to key sectors of the Russian economy, with retailing being a strategically important area of activity for the bank, the scale of which continues to increase. Gazprombank has a strong position on the domestic and international financial markets, being one of the leading banks in Russia for arranging and underwriting corporate bond issues, as well as in asset management, private banking, corporate financing and other areas of investment banking.
The Russian Venture Company (RVC JSC) is a state fund of funds and a development institution in the Russian venture capital market. The main objectives of the RVC are to stimulate the development of the private venture investment industry in Russia and take on the role of project office for the National Technology Initiative (NTI). The RVC’s authorised capital amounts to more than RUB 30 billion. This is owned in full by the Russian Federation, represented by the Russian Federal Agency for State Property (Rosimushchestvo). The RVC now has 27 funds with a total value of RUB48.6 billion (of which RVC’s share is RUB 26.5 billion). The RVC currently has funds in 225 portfolio companies. Total approved investments stand at RUB18.6 billion.
VEB Innovation, established in 2017, is the centre of competence on direct investment and venture capital at VEB.RU (part of Vnesheconom bank). VEB Innovation’s priorities include financing projects under the National Technology Initiative and the Russian Federation’s Digital Economy Programme, as well as helping innovative Russian start-ups enter international markets. The company offers Russian start-ups not just venture-capital investment, but also the opportunity to access financial products from VEB.RF group companies on special terms, allowing them to put in place schemes supporting innovative companies in Russia in line with their individual needs, including in facilitating access to international markets.