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. Last Updated: 07/27/2016

U.S. Fund Eyes $100M High-Tech Investment

A leading Silicon Valley venture fund plans to pump a sizeable portion of the $3 billion it currently has under management into Russian high-tech start-ups.

Tim Draper, founder and managing director of California-based Draper Fisher Jurvetson, said Friday his company could put as much as $100 million into its first Russia-dedicated venture fund.

"I do believe that we will see globally successful technological companies, comparable with Microsoft or Intel, coming out of Russia in the next two to three years," Draper told reporters during a scouting visit to Moscow, adding however, that DFJ is still in the planning phase for its Russian operations.

One of the world's largest venture capital funds, DFJ has lent support to several IT majors, including e-mail services giant Hotmail and leading web portal Yahoo, and now focuses on neo-technologies, artificial intelligence and commercial applications for military products.

DFJ has 11 funds and 19 offices worldwide, and eight of the several hundred companies it has invested are worth more than $1 billion.

Draper said that DFJ is looking to finance entrepreneurs who have unique products that can fill market niches and have a strategic advantage over similar technologies over several years.

Location, however, is not an important criterion for the fund. "We can move the company to another country where the product is most needed, or we can just split production and sales, as we often do," he said.

Russia has many unique products to offer, Draper said, recalling his first investment in a technology born of Russian ideas.

In 1985, a Russian scientist named Sam Geisberg contacted him in the United States and convinced him that his ideas for mechanical designing were worth investing in.

"Now he is the owner of the Parametric Technology Corp., which is worth $8 billion and is one of the largest companies in the United States," Draper said.

He said that due to a downward trend in the U.S. high-tech market, there is lower competition for newly funded companies in other countries.

Draper said he would meet with local fund managers to share experiences in the country.

"We are planning to have discussions with Delta Capital, Sputnik Fund and Alfa Capital regarding our possible cooperation in the near future," he said.

Kirill Dmitriyev, head of technology investments for Delta Capital, which has $450 million invested in Russia, welcomed the interest shown by DFJ, saying there are too few venture capital funds in the country.

"Most people, including Delta Capital, prefer to invest in the food industry and financial sector," Dmitriyev said.

"At the same time, we agree that it is a good time to invest in technologies, and we already have several such projects," he said.

"What is so special about DFJ is that they can offer worldwide marketing for innovative Russian products because they know the needs of the American and other markets very well."