ICO market in Russia twice exceeded the volume of venture capital investments

This year, Russian projects attracted $ 293 million through ICO, which is more than double the amount of venture capital investment in 2016. Nevertheless, ICO will not be able to replace venture investments, experts believe. The volume of the ICO market (Initial Coin Offering) in Russia since early 2017 was about $ 293 million, the general director of Skolkovo-Venture Investments, Vasily Belov, said at the Open Innovations forum. Thus, the volume of funds attracted by Russian companies with the help of ICO more than doubled the volume of venture investments in the country by the end of 2016, the size of which was $ 128 million, Belov said. "For an incomplete year, the volume of investments attracted in ICO exceeded the volumes of the classical venture market," he said.

In total, the open data on 25 Russian projects published on the ICO were analyzed. Of these, the five largest in total attracted about $ 190 million. 

"ICO allows start-up companies in a relatively short time to attract the necessary funds for the development of projects. At the same time, individuals from different countries can participate in the ICO, which seriously expands the pool of potential investors, "explains founder of the Universa blockchain and business angel Alexander Borodich, explaining the reasons for the popularity of the tool. In addition, ICO is one of the ways of crypto-currency investments, which makes them especially attractive for people who bought, for example, bitcoins several years ago and are now looking for where to invest.

At the same time, ICO will never replace venture investment, if only because there are many projects for which ICO as a means of attracting funds is not suitable, said Nikolai Legkodimov, head of the advisory group on promising technologies of KPMG. According to the expert, conducting ICO is mainly beneficial only to projects related to the blockchain and capable of scaling in blockchain. In addition, a venture investor has the opportunity to protect his investments, as he acquires a share in the project in the framework of investment with the appropriate legal documentation of the transaction. In the case of the acquisition of the tokens of the customary documents reflected in understandable documents, there are no guarantees. "This, for the time being, discourages traditional investors, since all the trust lies only with the code of the" smart contract "and with the confidence in the strength of the project team," explains Legkodimov.

With the fact that ICO can not replace the venture investment, agrees and Alexander Borodich. "These types of investment differ in different ways from changes in the market. Thus, investments in ICO-projects depend on the volatility of the course of the crypto-currency and therefore contain a greater amount of risk than venture development. " According to the expert, as long as the ICO is not regulated in any way, investors' interest to it will grow significantly, but other types of investments will continue to develop along with it.