US-based venture capital firms have joined interest from strategic investors Cisco and Nokia in providing initial support for the creation of a Russian ‘Silicon Valley’ based outside Moscow.
California-based Silicon Valley is home to many of the world’s largest independent VC funds and Russia has promised "unprecedented privileges" to the creation of its own version in Skolkovo.
Dmitry Medvedev, Russia’s President, met with US VCs Drew Guff, a co-founder of New York-based Siguler Guff, and David Kronfeld, chairman of Chicago-based JK&B Capital, on 25 May after announcing the scheme earlier this year.
Reported by news provider Bloomberg Businessweek, Medvedev said: "The venture capital market in Russia is poorly developed.
"Twenty funds are operating in the country with a volume of about $2bn. That’s almost nothing. And we’d like to do whatever we can to facilitate the development of this business."
Medvedev in March asked Ukrainian billionaire Viktor Vekselberg, owner and president of Renova Group, a large Russian conglomerate, to oversee efforts to create the Russian version of Silicon Valley.
Privileges may include tax holidays for 7-10 years. The government is discussing zero profit, property, land taxes and also reductions in social security tax payments, local news provider RIA Novosti said.
Innovative companies will get budget funds and priority in selling their products at state procurement tenders, the paper added.
Russia considers the development of the high-tech and innovation sector its top priority and has pledged billions of US dollars for financing the sector, which it hopes will end the country’s dependence on raw material exports.
The new centre’s activities will focus on five priority spheres: energy, information technologies, communication, biomedical research and nuclear technologies.
In March, Roger David Kornberg, a 2006-Nobel prize winner, US biochemist and professor of structural biology at Stanford University School of Medicine, said he would co-chair the scientific-technical council at Skolkovo, alongside Zhores Alferov, who won the Nobel Prize for Physics in 2000.