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"It is important that there is a new innovative Far Eastern system"
Ruslan Sarkisov, General Director of the Far Eastern Federal District, on new innovative solutions for the Far Eastern Federal District
The Far Eastern Fund for High Technologies (DFVT), created on behalf of President Vladimir Putin and Deputy Prime Minister and Presidential Envoy to the Far Eastern Federal District Yuri Trutnev, has been helping technology companies in the region since 2018. This year, the fund decided to attract promising projects from all over Russia to the Far East and conducted a large-scale #GoEast selection, in which more than 100 companies took part. What innovative solutions may appear in the region in the near future, EastRussia was told by Ruslan Sarkisov, Director General of DFVT.
- Ruslan Eduardovich, what projects is the foundation working with now?
- We have three main areas of work. The first is the projects of the fund's current portfolio - six projects that received support in the amount of 700 million rubles. Second, the new projects that we plan to finance are more than a dozen companies with a planned investment of more than two billion rubles, including #GoEast selection projects, which we recently carried out with the support of the Ministry for the Development of the Russian Far East.
And finally, the fund forms the base of promising companies for a new early stage venture capital fund (created according to the instruction of President Vladimir Putin given at the EEF-2019 - approx. ed.). More than 350 such projects have already been reviewed in the region, about 100 are being actively monitored by our team.
- Tell us about the selection program #GoEast: why is it needed, what projects was the fund looking for?
- #GoEast is the program of our fund for the search and selection of promising technological projects for the region from all over Russia, not excluding, of course, the Far Eastern Federal District (FEFD) itself. We conceived it in order to find relevant solutions that can be localized here with the help of the fund's financial support and to intensify the development of promising local companies.
In August, we launched a search across the country - we attracted large innovative development institutions and accelerators in Russia, such as Skolkovo, the Internet Initiatives Development Fund (IIDF), Generation S and others. Our colleagues from the RF Chamber of Commerce and Industry also helped us. In the medical direction, we found a partner in Israel - as a result, one of the Russian-Israeli projects ended up in the final.
In total, more than 100 teams from more than 20 Russian cities took part in the selection, not counting the Far East - we looked at local projects separately. More than three billion rubles is the total revenue of the companies that took part in the selection. That is, these are mature companies, for whose products and services the market has already voted in rubles. As a result, seven high-tech companies were chosen, including the Far Eastern developer of information security systems TsZI Sever from Yakutia.
The Far Eastern Federal District accounted for about 15% of applications. This is sufficient considering the fact that many Far Eastern enterprises are at an early stage of business development. We had serious selection criteria, for example, the revenue of participating companies should be at least 30 million per year, and many simply could not pass this threshold. Nevertheless, we took over the monitoring of Far Eastern companies - mainly for an early stage venture fund.
- What projects did the fund find using #GoEast and how does he plan to help them?
- We have selected seven projects in total. These are companies whose solutions may be in demand in our rapidly changing world, and which may be especially relevant for the Far East region. For example, the telemedicine Russian-Israeli project of the International Center for Medical Development, the guys make devices for home diagnostics of a number of diseases. One of the company's products is a remote therapeutic or pediatric appointment service based on a special device with which a doctor can remotely examine the heart, throat, ears, skin, listen to the lungs and heart rate, measure body temperature, and diagnose many of the most common conditions.
Also, two financial services reached the final - Unicom24 and Ckassa. Ckassa, for example, works with self-employed and small entrepreneurs. The application is used by taxi drivers, couriers, tutors - everyone who accepts payments for their services. For example, the service allows taxi drivers to receive money for trips paid for by bank transfer to their electronic wallet.
Other finalists include the Rerooms home improvement marketplace, the Cleaner garbage collection service, and Online Patent, a digital platform for intellectual property protection. And finally, the Far Eastern company - the developer of information security systems from Yakutia TsZI Sever.
Together, these companies requested 1,6 billion rubles from the fund to finance their scaling plans and to enter the Far Eastern region.
- When will companies be able to receive funds from the fund?
- The average cycle of one financing transaction is from four months, respectively, now this process will be launched with each company. Let's take a closer look at their business model, their current financial condition, so that companies are ready to accept our investments and be financially stable.
- Why are startups from Central Russia interested in working in the Far East?
- On the one hand, for the same reasons why they are interested in working in any other region - this is the ability to scale at the expense of new clients, customers. On the other hand, there are unique opportunities associated with the geographical proximity to the Asia-Pacific region. For some, tax preferences for priority development territories and the free port of Vladivostok are relevant.
There are many opportunities for localizing high-tech business, but there is still a sufficient number of successful cases to accumulate - this is what we are now doing together with our portfolio companies. In the Far East, a critical mass of innovative projects is just being created, a venture market is being formed. It is important that a new innovative Far Eastern system appears, and our task is to help this process and accompany the company so that the system grows and reproduces itself. This is what our foundation is for.
- What are the main components of the ecosystem for supporting technological entrepreneurship in the region already, and what is missing?
- Over the past two or three years, a lot has been done to develop the internal “market” of innovative companies. I would like to note the opening of technoparks and local support institutions - the Russian Technopark, the IT park in Yakutia and the B8 accelerator, the Far Eastern Innovation Promotion Agency; Sakhalin is now planning to launch its own IT park. The development of technology parks and accelerators significantly affects the number and quality of innovative projects in the region.
The full cycle venture system is still being formed - the early stages fund, which the president ordered to create, will give a noticeable impetus to the development of local innovative companies. Also, there is still not enough private and corporate investment in high-tech startups in the Far Eastern Federal District.
Far Eastern startups are currently not very visible on a federal scale. For understanding: in 2019, projects from the Far Eastern Federal District accounted for only 2,8% of the grants issued by the Fund for Assistance to Innovation, less than one thousand projects from the region (0,5% of the total base) took part in the IIDF accelerators in its entire history. I think that the planned support measures in the region will make it possible in three to five years to make the Far East a new point on the innovative map of Russia.
- What projects do you think the Far East is currently lacking the most?
- While the region is dominated by IT companies - they require the least investment to start a project. The second and third places are taken by biotechnology and robotics, since these areas are strong in Vladivostok at the Far Eastern Federal University (FEFU) and this gives a result. Teams from the Far East have repeatedly won prizes at the World Robot Olympiad (WRO). In 2019 alone, the FEFU team won a bronze medal in the Advanced Robotics Challenge.
In terms of prospects, I would single out projects in the field of alternative energy and energy storage, telemedicine.
- Does the coronavirus pandemic affect the pace of implementation of the fund's projects?
- I would rather say that the teams of portfolio projects had to reorient themselves to meet the current challenges. And for some, this means opening up whole new promising directions. For example, Promobot quickly developed the "Thermal control" complex, which allows you to make express diagnostics of health, including measuring the temperature without human intervention. The complex is already being delivered to the Far East - it has been installed at the Bilibino NPP, at the railway station in Vladivostok. Another good example is that the Yuzhno-Sakhalin IT-company Vizitek presented to the President in July during the Supervisory Board of the Agency for Strategic Initiatives its Anti-pandemic system for monitoring and recording health status in industrial production and is now introducing it at large customers.
About selection #GoEast
Investment selection #GoEast is a program of the Far Eastern High Technology Fund to find promising projects for the Far East. The initiative started on August 12 and ended on October 19, 2020. Any technology company with proven efficiency and revenue of 30 million rubles per year in the areas of IT, energy, industrial technology, biomedical technology and educational technology could take part.
In total, more than 100 teams from more than 20 cities have applied for participation: Moscow, St. Petersburg, Perm, Yakutsk, Khabarovsk, Ulan-Ude, Kazan, Yekaterinburg, and other cities. Teams from Israel also took part in the selection.
The final took place on October 19 with the support of the Ministry for the Development of the Russian Far East and the Fund for Infrastructure and Educational Programs of the RUSNANO Group, which is a co-organizer of the Moscow International Forum for Innovative Development 2020 "Open Innovations". Within its framework, the selection winners were announced.
About the Far Eastern High Technology Fund
The Far Eastern High Technology Fund was established in August 2018 on instructions from President Vladimir Putin and Deputy Prime Minister - Presidential Envoy to the Far Eastern Federal District Yuri Trutnev. The volume of the fund is five billion rubles. The fund invests in IT, industrial technologies, alternative energy, robotics, smart city services, biotechnology, etc. Portfolio companies - Far Eastern IT companies Vizitek and Hotlead, Russia's largest manufacturer of service humanoid robots Promobot, manufacturer supercapacitors Titan Power and Cinemood, a Russian manufacturer of portable overhead projectors.