US-listed computer equipment company Cisco has agreed to invest $1bn in Russian entrepreneurs over the next decade through a five-part program including corporate venturing.
The five phases will run in parallel and are designed to provide support for Russia’s Skolkovo Project, its equivalent of America’s Silicon Valley started March last year by Russia’s President.
In the first part, Cisco said it would extend its existing $30m venture commitment to Russia-based venture capital Almaz Capital Partners made in 2008 with an incremental $100m. Cisco has already taken a stake last year in Ozon, a Russian online retailer, as well as Apollo Project and Parallel through the Almaz fund. Peter Loukianoff, managing partner of Almaz, said: "Russia is unique relative to other emerging venture capital markets, in that it offers both innovation and market opportunities. Like Israel, Russia has tremendous technology and innovation potential, and similar to China and India, it has a large and fast growing enterprise and consumer market."
Last month, US-based private equity firm Siguler Guff committed $250m to Skolkovo through its Russia Partners VC subsidiary.
To boost entrepreneur’s business development, Cisco said it would increase the number of its networking academies across Russia to 300 from 133.
In phase two, Cisco said it would open an office in Skolkovo, which is just west of Moscow. Cisco will help design the Technopolis Skolkovo based on its framework used at the Cisco Globalisation Centre East in Bangalore, India. Cisco said Skolkovo would be the first of its Smart+Connected communities in Russia to boost sustainable social, economic and environmental development.
Dmitry Medvedev, President of the Russian Federation, said: "During the next decade Russia should become a country in which the welfare and the good quality of life is ensured by its intellectual, rather than natural, resources, its innovative economy.
As part of phase three, Marthin De Beer, senior vice president at Cisco, will establish a second global headquarters for its Emerging Technologies Group engineers in Skolkovo to incubate several internal start-up business units.
Phases four and five will focus on partnerships with Russian venture capital firms, such as its I-Prize competition to be open specifically to entrepreneurial teams in Russia able to help identify and build Cisco’s next $1bn businesses. Cisco will provide $175,000 in overall prize money for the winning Russian teams in the contest, $100,000 to the winner, as part of the multi-year investment.
Cisco will also work on joint development projects, such as for smart grid, financial services, service provider models, financing, broadband implementation and social networking.
Paul Mountford, president of emerging markets at Cisco, said: "Russia is rapidly building out its communications infrastructure, which presents a unique opportunity for local entrepreneurs to develop new technologies and applications. We see a clear economic benefit to Cisco, and it is our belief the I-Prize innovation competition for Russia has the potential to generate between 200 to 300 new ideas by tapping into these new sources of collective development."
Cisco has made more than $2bn of direct and indirect venture investments, with about half in the US and the rest internationally, including in China, India, Israel, South Korea, Mexico and across Europe, including Russia.
Cisco’s venture capital efforts are part of its corporate development group headed by Charles Carmel, a Cisco vice president.
Separately, US-based venture capital firm Draper Fisher Jurvetson and Cisco announced the 16 finalists in their second co-sponsored Global Business Plan Competition for university and business school students. The finalists will be competing from their respective geographic areas on June 29, and the winning team will receive a minimum seed investment of $250,000.
Finalists hail from 18 schools in seven countries. The complete list is as follows:
|
Name of Company |
Company Location |
University |
Business Plan Summary |
| Ambiq Micro |
US |
University of Michigan |
Leads the way to ubiquitous computing with the world’s most energy-efficient microcontroller (MCU). |
|
Cambridge Nanotubes |
UK |
University of Cambridge |
Provides unique high-energy materials capable of increasing battery life for laptops and cell phones by up to 100%. |
|
CellTV |
Israel |
Ariel University Center |
Enables multiple HD channel broadcasts to an unlimited number of clients without decreasing the throughput of Wi-Fi networks. |
|
Commuter Advertising |
US |
DePaul University and University of Dayton |
Creates and sells relevant and entertaining 10-second audio sponsorships inside trains and buses that are geo-coded and played at specific times; shares revenue with public transit agencies. |
|
Deli Worm |
China |
Sun Yat-sen University |
Uses automation systems to mass produce live organic worms to substitute current fish meals and mitigate the depletion of fish stock. |
|
Digital Proctor |
US |
University of Texas-Austin |
Creates enterprise online security company with first market vertical in distance education. |
|
Epythia |
Russia |
Higher School of Economics |
Enables context-aware planning service with alerting and rescheduling based on a user’s current and planned location. |
|
F.A.N. MEDIA |
China |
Peking University |
Provides free printing service to consumers that places targeted advertisements on one side of the free F.A.N. MEDIA printing paper and allows consumers to use the blank side for printing documents or photographs. |
|
FayShine |
China/US |
University of Illinois at Urbana-Champaign |
Provides next-gen image-recognition technology for comprehensive shopping guidance. |
|
GlucaGo |
US |
Purdue University and Indiana University |
Provides revolutionary drug injector that is easy to use and low cost, and has been designed to fit in existing filling lines for freeze-dried products, allowing unstable drugs or vaccines to maintain their stability at room temperature |
|
IOS Financial |
US |
Northwestern University |
Enables online marketplace that, in a targeted and value-added way, matches banks seeking to grow with small businesses seeking commercial loans |
|
Lark Technologies |
US |
MIT |
Provides compelling nonmedical solutions around optimizing sleep via smart phones. |
|
MicroMed |
India |
IIT Kharagpur |
Provides microfluidics technology for use in pathological detection that requires minimal human intervention, reduces costs, and improves efficiency in India health care markets. |
|
Nanodyne |
US |
UC Davis |
Increases hard disk drive capacity by 800% through a process that utilizes metal-organic-silicon thin film, or MOSTF (code-named HyperDrive). |
|
OsComp Systems |
US |
Harvard and MIT |
Commercializes a breakthrough patent-pending compression technology that will revolutionize the natural gas industry. |
|
Silicon Reef |
Brazil |
Federal University of Pernambuco |
Designs high-efficiency power converters and power management circuits for handling the energy-harvesting process. |