The results of 2025 in the Russian investment market. A joint research by KAMA FLOW and Lch.Legal

KAMA FLOW, in collaboration with the law firm LCH.LEGAL, presents an annual review of the Russian venture capital market. The study summarizes key trends in venture and M&A transactions, as well as factors influencing investment activity and deal structure in 2025.

Key Findings:

📌The key rate remained high throughout the year, leading to the postponement and freezing of corporate budgets, reduced investment project efficiency, and the redistribution of capital into deposits. This created pent-up demand and increased pressure on companies' working capital.

📌In 2025, changes to tax and administrative regulations were adopted and announced, taking effect in 2026. These changes are already being considered by investors and companies when planning projects and scaling their businesses, primarily in the SME and technology segments.

📌Amid expensive capital and regulatory restrictions, the shift toward M&A deals and consolidation has intensified, while the number of traditional venture rounds has continued to decline.

📌The legal instruments of venture and M&A transactions are increasingly blending.

📌Strategic buyers prefer to enter capital in stages, combining investments with commercial contracts. This approach reduces risks for investors and will become more prevalent in 2026.

📌Assets with a privatization history are associated with increased legal risks and require a more cautious approach from investors.

📌Investor interest in AI is shifting toward practical solutions with clear economics and commercialization potential, rather than "hype" projects.

📌Intellectual property is seen as a key factor in company valuation, and IP due diligence is becoming a standard part of transactions.

📌Tightening regulations in the personal data sector and increasing fines have increased the importance of compliance in investment analysis.

📌Amid project freezes and long contract cycles, demand for anti-crisis and working capital financing is growing.

Pavel Okhonin, Partner at KAMA FLOW:

"The entire year of 2025 was marked by a high key rate. Some reductions in the second half of the year did not have a significant impact on budgets (including those for technology solutions). Most companies pushed back project implementation deadlines, which critically impacted the activities and growth rate of digital and other solution providers. We believe 2026 will be quite challenging. Hopes for a warming economy and budget transparency are linked to the possibility of a further reduction in the key rate. If the trend is systemic, we hope for both a recovery in the commercial market and an acceleration in the development of technology vendors. Overall, we expect fairly high M&A activity. This won't indicate a significant increase in multiples, but we see accumulated capital among a number of strategic companies that are willing to actively acquire smaller players in their market. We believe consolidation is ahead in a number of sectors."