Srei Teams Up With Russian Development Bank To Create $200 Mn IT Fund

Srei Teams Up With Russian Development Bank To Create $200 Mn IT Fund

SUMMARY

The IT Fund Will Explore New Investment Opportunities In Russia, India And Other Regions.

Hemant Kanoria-founded Srei Infrastructure Finance Limited has joined hands with Russian Government-owned Vnesheconombank to create a $200 Mn fund. The fund aims to facilitate innovation in the field of information technology (IT). Headquartered at Kolkata, the family-run company signed a Memorandum of Understanding (MoU) with the development bank last month, as part of the Indian government’s continued efforts to foster cooperation with Russia.

According to an official statement, the fund will be utilised by both parties to explore new investment opportunities in the IT domain in Russia, India and a few other regions. The MoU was signed in the first week of June at the St. Petersburg International Economic Forum, an annual business conference in the economic sector. Both Prime Minister Narendra Modi and Russian President Vladimir Putin attended the event.

A Kanoria Foundation entity, Srei is a private sector infrastructure company. It claims to have consolidated assets of about $5.5 Bn. Established in 1985, the enterprise made its debut in the Russian market nearly 12 years ago. Its chief activities are services such as infrastructure finance, equipment finance, advisory and development, capital markets, insurance broking, and alternative investment funds.

Commenting on the newly-created tech fund, Srei Chairman and Managing Director Hemant Kanoria said, “We will leverage the rich scientific heritage and growth potential of India and Russia. The fund will serve as a two-way bridge between the Indian and Russian markets and create opportunities for India-Russia cross-border technology cooperation.”

Vnesheconombank: An Overview

Founded in 1922, Vnesheconombank provides funds for developmental projects that aim to strengthen the country’s economy. It also facilitates diversification, and promotes investment activities in a variety of sectors. Since it started operations, the state-managed financial institution has successfully raised more than $2 Bn for IT and innovation-related initiatives within Russia. A spokesperson of the bank said, “In order to implement the memorandum provisions, the parties intend to create a working group between representatives of Srei and Vnesheconombank.”

Srei and Vnesheconombank are also in talks about the creation of a jointly-held leasing platform, as part of which the former will receive a credit line of up to $500 Mn. The goal would be to make Russian high-technology products more accessible to the Indian consumer.

Vnesheconombank has also partnered with the China Development Bank for a 15-year-long loan worth $500 Mn to fund innovations in the realm of technology.

Indo-Russian Ties: Other Recent Collaborations

India-Russia relations date back to the 1950s, especially to former Prime Minister Jawaharlal Nehru’s first visit to the Soviet Union in June 1955. The 70-year-old partnership has been built mainly around such areas as defense, space and nuclear energy. More recently, Indo-Russian collaboration has played a major role in the expansion of the Indian startup ecosystem, especially in areas like IT and technology.

During last month’s visit to Russia, Prime Minister Modi discussed the Free Trade Agreement (FTA) with Russian President Vladimir Putin. Although ecommerce trade does not fall under its purview as of yet, the new FTA agreement is expected to increase the trade of goods and services, as well as reduce trade barriers between the two countries. As a result, India will finally get access to a market with a trade potential of  $37 Bn-$62 Bn.

In the last couple of years, there has also been increased engagement between Russian venture capital investors and Indian startups. Ru-Net Holdings, for instance, is a Moscow-based VC firm that has been actively exploring the Indian market. Founded by Leonid Boguslavsky and Kirill Sheynkman, the company’s profile includes 30 Internet and tech startups across Russia, Europe, North America, and Southeast Asia.

In February 2016, for instance, Russian conglomerate Sistema Joint Stock Financial Corporation (JSFC) floated a proprietary $50 Mn (INR 340 Cr) Asia Fund to support Indian startups operating in the technology and niche consumer retail segments.

The latest deal between Srei and Vnesheconombank is an important milestone in the Indo-Russian partnership that could potentially strengthen the tech startup industry of both countries.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Srei Teams Up With Russian Development Bank To Create $200 Mn IT Fund-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Srei Teams Up With Russian Development Bank To Create $200 Mn IT Fund-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Srei Teams Up With Russian Development Bank To Create $200 Mn IT Fund-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Srei Teams Up With Russian Development Bank To Create $200 Mn IT Fund-Inc42 Media
Srei Teams Up With Russian Development Bank To Create $200 Mn IT Fund-Inc42 Media
You’re in Good company