Technology company Cisco has provided the anchor investment for newly launched Almaz Capital’s Russia Fund I, which has held a first close on $60 million (€37.8 million).
Cisco, which has invested more than $2 billion in venture capital investments off its balance sheet, contributed “a significant amount of that $60 million”, vice president for corporate development Hilton Romanski told PEO. The remainder was contributed by Russia-focussed investment firm UFG Asset Management.
The fund will target early stage media, technology and telecom investments in Russia. Almaz aims to raise “a substantial of capital on the back end of the $60 million”, said Romanski who declined to disclose the fund’s target. Almaz intends to make approximately 10 to 15 investments over the next three to five years.
Our intention when we invest is to drive strong strategic returns by being able to get visibility into new innovations before they become mainstream
Cisco had spent two to three years seeking a team with the right combination of experience in technology-focussed venture capital and the Russian market before selecting Almaz.
Cisco’s venture strategy for emerging markets has historically been to provide the anchor investment for a venture fund, potentially moving into direct investment and later conducting acquisitions if the market remains healthy, said Romanski.
“We quite frankly would look forward to opportunities where it made sense to potentially co-invest with Almaz where… there was particular value that we could add to the portfolio companies,” said Romanski.
Cisco has invested in markets including China, India, Israel, Asia Pacific, Europe and the United States.
Russia is attractive to Cisco due to the region’s levels of technology innovation and underfunded talent. Particular areas of opportunity in Russia include software development, silicon development and hardware, and IT services, said Romanski noting that these are areas in which Cisco can aid in evaluating and developing companies.
“Our intention when we invest is to drive strong strategic returns by being able to get visibility into new innovations before they become mainstream [and] in some cases it’s to understand new business models as they’re being innovated,” said Romanski. Cisco also occasionally uses investment capital to align interests in by investing in related companies well-positioned in their geographies.