Mangrove Capital contemplates Russia fund launch

Luxembourg-based venture capital firm Mangrove Capital Partners is considering setting up a Russia-focused investment fund to satisfy the demand it has seen from foreign investors to access Russian companies in early stages of development.

Gerard Lopez, co-founder and managing partner at Mangrove, said: “For us, Russia is an extension of the continent. It is much closer to us than the other BRIC countries both geographically and in terms of mentality. It is rich in human capital and natural resources, and geographically forms a bridge between Europe and Asia.”

He is particularly keen on early-stage enterprises in the technology sector. He mentioned KupiVip, a Russian online shopping company, which Mangrove backed four years ago, when it started with a three-strong team. Today, the firm has expanded to 1,000 employees and is one of the largest e-commerce companies in Russia.

Another sector that is of interest is the automotive industry. “Russia has at least one generation to jump in the automotive sector, and it will soon open up to new technologies,” Lopez said. Like technology, this sector is full of young entrepreneurs keen to develop their potential.

So far, the venture capital firm has been investing in these businesses directly, backed by a small group of investors from Europe and the US. But Lopez has seen a great deal of interest from corporate, institutional and private investors, which has fuelled the discussions about setting up a fund.

The fund would invest in similar projects and would be domiciled in Luxembourg, which is an attractive jurisdiction for investors seeking transparency, especially in relatively risky markets such as Russia.

The final decision on the launch will likely be taken within the next couple of weeks.

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