Pre-IPO market research by KAMA FLOW

The collective investment market in Russia is developing rapidly, filling the vacuum left by the shrinking venture capital market. However, its immaturity carries significant risks for investors.

 

KAMA FLOW experts have analysed the key trends:

 

Why is the market growing?

Over the past three years, venture capital investment in Russia has shrunk 30-fold. The reduction in professional capital has led to an increase in deals involving retail investors: 44 public deals worth ₽10bn between 2022 and 2024. Including non-public deals, the volume of placements could be around 30% higher, reaching ₽13-15bn.

 

Collective Investment Risks

❗️ Pre-IPO company valuations are 3.9 times higher than for M&A deals

❗️ Organisers' fee structure encourages inflated valuations

❗️ Due diligence is often not carried out, or is carried out in a limited format

❗️ ‘Pre-IPO’ is used as a marketing term, but does not impose listing obligations.

 

What to do.

✔ Strengthen requirements for pre-analysis of transactions

✔ Introduce corporate governance requirements

✔ Engage professional investors (PE/VC funds) to participate in rounds and validate terms and conditions

 

Collective investments have significant potential, but their sustainable development requires transparency and trust from market participants.

 

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Photo: Gleb Shchelkunov, Kommersant