Two days after Russian President Vladimir Putin and his Chinese counterpart Xi Jinping signed a raft of energy deals in Beijing on Saturday, a delegation of high-flying Chinese internet entrepreneurs visited the Skolkovo innovation centre as part of a fact-finding mission to the Russian capital.
Vladimir Putin and Xi Jinping pose for a photo in Beijing after signing a series of agreements on Saturday. Photo: Kremlin.ru.
The delegation was led by David Zhang, founding managing partner of Matrix Partners China, a venture capital investment firm, and included senior representatives of Baidu web service company, YY.com chat and live videos platform and Cheetah Mobile internet company, who were here to learn more about internet development in Russia.
“There’s tons of money in China and there is also the desire for technology. Russia clearly has a lot of technology,” said Zhang, who proposed that Monday’s visit should be followed up with a series of meetings to help Russian tech startups find Chinese investors.
“Many of the entrepreneurs are very young, and they all have strong international expansion ideas,” he said.
Zhang suggested that Chinese money could fill the void left when Western capital dried up amid sanctions imposed on Russia over the Ukraine crisis. Putin and Xi’s weekend meeting was only the latest in a series of summits that testify to the good relations between Russia and China, he said.
Putin’s weekend trip to China was his fourth visit to the country since Xi became president in 2013.
“The Chinese market is very interesting for most of our startups, but due to significant cultural differences from Russia, it’s difficult for our companies to penetrate the Chinese market,” said Vladimir Sakovich, head of Skolkovo’s investment department.
Zhang said Chinese companies found it difficult to enter the Russian market for the same reason, and proposed that Matrix could be a bridge between the two countries’ entrepreneurs.
A selection of Skolkovo startups seeking to enter the Asian markets was presented to the Chinese delegation, including Nanosemantics, which makes chatbots for online stores, major banks and telecom companies. The company, whose research shows that more than 50 percent of clients don’t realise they are talking to a robot, plans to enter the Chinese market in the near future, said Sakovich.
YY.com, which was represented at the meeting by its CEO, Xueling Li, is in the process of setting up a Russian office. Li expressed an interest in finding out the criteria for qualifying for Skolkovo residency status.
Joint Russian-Chinese venture funds exist, mostly with state backing, but there are also major differences between the two countries’ investment markets. In Russia, most of the capital invested in Skolkovo startups comes from domestic sources, said Sakovich.
“In China’s VC market, a large proportion is foreign capital, mainly from the U.S.,” said Zhang.
Since relations with the West deteriorated over Russia’s role in the Ukraine crisis, Moscow has focused on strengthening its ties with Beijing. Xi said at the weekend that the two countries “should widely promote the idea of being friends forever.”
Skolkovo also has close ties with China, and is in the process of opening a branch of the innovations foundation in Beijing. Last year, the foundation teamed up with China’s Cybernaut Investment Group to create a $200 million venture fund to stimulate high-tech innovations, and several Skolkovo companies have already seen success on the Chinese market.
The Chinese entrepreneurs also visited the headquarters of Mail.ru during their visit to Moscow, and planned to visit fellow Russian internet giant Yandex.