Dmitry Pimkin, Deputy Chairman of Management Board of “RUSNANO”, talks about supporting innovations, about investing in technology business, about the balance between openness and state protectionism.

VIDEO [Russian; Translation support]

Coherent exposition of the interview

1. Comparing international innovation support models. The interview opens with a comparison of how advanced economies support innovative companies versus the domestic approach. Most developed countries rely on multi-tiered systems that accompany technology from research to large-scale production. The emphasis is on a coherent ecosystem rather than isolated instruments. Russia has largely built a comparable architecture. However, structural imbalances within that system remain, and these become the core subject of the discussion.

2. Structure of the domestic innovation investment system. The country’s innovation support model is described as multi-layered. It includes grants for early stages, venture capital mechanisms, growth-stage investments, and instruments for large industrial projects. Infrastructure elements such as technology and specialized centers also play a role. Formally, nearly all stages of the innovation lifecycle are covered. The challenge lies not in the presence of tools, but in how evenly and effectively they operate.

3. Gaps in coverage and capital shortages. Despite broad formal coverage, certain sectors remain chronically underinvested. The problem is not a lack of viable projects, but insufficient available capital. The number of promising assets and technology teams exceeds current funding capacity. This creates bottlenecks that slow the development of entire industries. Public resources alone are objectively limited in addressing this gap.

4. Mid-scale chemical production as a structural example. Mid-scale chemical production is cited as a clear example of systemic underinvestment. After the collapse of the Soviet industrial model, this segment largely fell outside investor interest. Production volumes of tens of thousands of tons appear too small for major capital players. At the same time, profit margins can be exceptionally high. Despite its semi-commodity nature, the sector is economically very attractive.

5. Why private capital avoids this segment. Large industrial corporations are generally uninterested in projects of relatively modest scale. Investments of a few billion rubles are too small to justify management attention. At the same time, a strong mid-sized industrial layer capable of consolidating the sector is largely absent. Existing enterprises are often upgraded legacy assets. They lack the resources needed for large-scale expansion and industry integration.

6. The state’s role in launching new industries. Under these conditions, a state-backed investor is forced to address market failures. Its role is to initiate production chains where private capital is unwilling to enter first. This does not replace the market, but creates initial conditions for its emergence. Once projects reach stability, private investors are expected to step in. This approach unlocks latent industrial potential.

7. Example of a completed industrial investment. The interview highlights a chemical production project based on an innovative technology. A modern manufacturing facility was built with an import-substitution focus. The project completed a full investment cycle, from launch to sale to a strategic buyer. The state investor exited with a profit. This case demonstrates the practical viability of the model.

8. Scale and outcomes of the historical investment portfolio. Over the years, several thousand projects passed through expert and investment review. Direct investments were made in roughly one hundred companies. Approximately half have already been sold or closed. Failures are treated as an inherent part of industrial and venture risk. Overall, the portfolio is assessed as both financially and technologically successful.

9. Completion of the first investment cycle. The first investment cycle is nearing completion. Remaining assets are being sold, while some projects are being wound down. This is viewed as a normal portfolio cleanup process. At the same time, a new operational model has been launched. It differs fundamentally from the original approach.

10. Transition to a fund-based investment model. The second investment cycle is built around specialized funds. Capital is allocated not to individual companies but to diversified portfolios. Management and ownership are separated, reducing investor risk. This structure aligns with global investment practices. It also makes it easier to attract private and institutional capital.

11. Risk sharing and governance logic. The fund model reduces dependency on the success of individual projects. The management company is responsible for selection, oversight, and exit execution. Investors gain access to industrial expertise without deep operational involvement. This makes technology investments more accessible to financial capital. The model is designed for long-term sustainability.

12. Examples of successful industrial exits. The interview references projects in advanced materials and industrial packaging. High-complexity manufacturing facilities were built and brought to market. These assets were later sold to private investors at attractive returns. Importantly, these were full-scale factories rather than early-stage startups. This underscores the industrial focus of the strategy.

13. Investments in renewable energy. A separate segment addresses solar and wind energy investments. Both manufacturing capacity and generation assets were developed. The strategy assumes exit from ownership within several years. The state investor does not intend to remain a permanent shareholder. The objective is market formation and private capital attraction.

14. Asset valuation methodologies. Asset valuation follows internationally accepted standards. Methods include comparables, replacement cost, and discounted cash flow analysis. Decisions are based on business fundamentals rather than administrative directives. Company maturity and market conditions are carefully considered. This reflects a purely investment-driven approach.

15. Market-based deal structures. All transactions are conducted on market terms without preferential treatment. State ownership does not confer automatic advantages. Buyers focus solely on project economics. Deal structures may include deferred payments or performance-based conditions. These practices mirror those of private investment funds.

16. The strategic role of nanotechnologies. All investments must be linked to nanotechnologies. In co-investment funds, at least half of capital is allocated to such projects. This is a foundational strategic principle rather than a formal label. Nanotechnologies are viewed as a basis for long-term technological sovereignty. They define the overall investment focus.

17. A material interpretation of “nano”. Nanotechnologies are understood primarily as physical, material technologies. The emphasis is on tangible products that can be manufactured and deployed. This includes new materials, coatings, structures, and industrial components. The strategy deliberately avoids purely digital or service-based interpretations. The focus remains on real industrial transformation.

18. Cautious approach to digital investments. Digital technologies are not excluded as a potential direction. However, current expertise is concentrated in material and industrial domains. Moving deeper into digital would require new teams and competencies. This is viewed as a possible future path rather than an immediate priority. Maintaining strategic focus is considered essential.

19. Impact of advanced materials on the economy. Nanotechnologies, particularly in materials science, are reshaping the physical world. They enable lighter, stronger, and more functional structures. This affects transportation, construction, energy, and industrial design. New markets and value chains are emerging as a result. The growth of this sector is seen as a long-term trend.

20. Global context of nanotechnology development. Nanotechnology initiatives exist worldwide, not only in Russia. Countries apply different financing and implementation models. The Russian approach was developed with close attention to international experience. At the same time, it reflects national economic and institutional specifics. The strategy aligns with global technological trajectories.

21. Exit strategy as a core investment principle. Exit scenarios are defined at the investment entry stage. Potential buyers and time horizons are often identified in advance. A typical exit window is around five years. This discipline reduces uncertainty and structures decision-making. Nevertheless, real outcomes do not always follow initial plans.

22. When exits deviate from expectations. In some cases, buyers are unable to complete acquisitions on schedule. Reasons may include market shifts, financing constraints, or operational performance. Alternative solutions are then applied. These include deferred payments, refinancing, or sourcing new investors. Flexibility is treated as a critical capability.

23. International investments and constraints. The portfolio included foreign projects and international buyers. Several assets were successfully sold abroad. However, geopolitical developments significantly narrowed these opportunities. In some cases, exits had to be executed under unfavorable conditions. These risks are recognized as external rather than asset-specific.

24. Experience with Asian markets. The interview separately addresses experience in major Asian economies. Initial expectations proved overly optimistic. These markets require deep understanding of institutional and cultural specifics. A reassessment of strategies is currently underway. The emphasis is shifting toward more pragmatic and informed engagement.

25. Protectionism, closed markets, and future investment logic. The discussion concludes with observations on rising global protectionism. Countries increasingly seek to secure their technological and industrial chains. This elevates the role of national investment institutions. Maintaining a balance between market protection and technological openness is essential. With additional capital, the pipeline of viable investment projects is assessed as substantial.

Rules of investments

It is important for us to have a clear exit strategy”: how and in whom Rusnano invests

In recent years, RUSNANO has changed its investment model—investments have become more focused, and the average deal term has halved. In parallel, the domestic private equity market has been evolving, where state investments now dominate. Deputy Chairman of the Management Board of the managing company RUSNANO Dmitry Pimkin … discussed which high-tech directions in the industrial sector he considers the most promising, how RUSNANO invests, and why he is concerned about “chocolate” deal terms.

How the Russian private equity market is structured

The Russian private equity market in recent years has been reorienting toward domestic investors. Potential foreign buyers are refusing deals due to sanctions risks, so their place is being taken by Russian companies. And since the share of the state in the Russian economy is high (according to various estimates, it amounts to 60—70%), the key investor is becoming the state or companies with state participation. But I see nothing wrong with this, because the market is still alive, even if its growth equals the growth of the economy. If in some year there is a big deal, at least $200 million, then it has grown. When in spring 2013 Rosneft completed the deal to acquire TNK-BP, of course, it affected the entire market. But if there is no such deal, the market is essentially stagnating. I see this even in our companies—no investors are chasing after them and trying to snap them up like hot cakes.

We have not yet fully replaced American and European investors with Arab, Asian, and Indian ones. We are moving in this direction, but for now, in my view, Russian companies have not learned how to work with them. There are one-off purchases, Arab investors are looking at our petrochemical production, but calling them serial investors is definitely not possible.

The volume of state investments in this market is dominant. I think on average this figure is 60-70%, but it’s important to note that we are talking not about investments from the state budget, but about investments by companies with state participation. Each company chooses investment directions independently, based on its own needs.

Attracting third-party investments to the Russian market today is very difficult. We show potential investors our own deals, show a history of successful investments—when there are more than 100 major deals in the historical portfolio, there is something to show. Sometimes it’s easier to attract money for a specific team that has high industry expertise and a successful pool of projects. In our case, the name RUSNANO means a lot, because we act as smart money, that is, we not only provide money but also develop the company. And we can help in many ways: from PR to corporate governance and dialogue with banks.

I would highlight three promising high-tech directions in the industrial sector.

  • Advanced biotech. In terms of biocoding and biochipping, cyborgization—this should all develop strongly in the next 10 years, in my opinion.
  • New materials. The work of RUSNANO with nanotubes, the overall vector of development of composite materials and new plastics—will quite seriously affect many spheres of our lives, for example, the development of energy, architecture, or clothing.
  • Energy storage systems. Another solution that will greatly change the energy landscape and help the rapid spread of “green” generation.

Now RUSNANO is changing its investment model—we are moving away from direct equity investments to investing through funds jointly with industry partners. Previously, we had non-industry teams, so-called “generalists,” that is, for example, my portfolio included a set of projects from microelectronics to medium-tonnage chemistry. Now for the same medium-tonnage chemistry, we have a corresponding fund—”Rosnano-Sintez,” which we created jointly with the Sintez OKA group of companies. This is a separate industry team that tracks all interesting players in medium-tonnage chemistry and looks for potential deals. The model change means that we have become more focused and more understandable to external investors. And, likely, thanks to this change, the quality of RUSNANO’s direct investments will grow, because there will be more industry expertise.

We engage in direct investments, that is, we invest money in shares of non-public companies that have already passed the venture stage. We have two funds engaged in venture investments. For example, Rusnano Sistema SICAR, a joint fund of AFK Sistema and JSC RUSNANO, which invests in high-tech projects at the early stage, as well as in growing and mature companies. The average size of one investment is $3–10 million. Another option is the Far Eastern High Technologies Fund, which invests in venture-stage projects up to 100 million rubles, and in growth-stage projects—up to 500 million rubles. But in this case, the startup must be located in the Far East. Perhaps we will invest more in startups when we start working more closely on the national program Digital Economy of the Russian Federation. There will definitely be options for early-stage projects there.

The first thing investors look at is the team. Moreover, it’s important to understand that you cannot formalize requirements for the ideal team. Experience in the field, education—all these points are too conditional, and in each case they need to be evaluated separately. It is especially important for us that the leaders are interested in the company and participate in it with their own money; this increases trust. And we evaluate the project itself according to the classic scheme: returns, financial models, markets, risks.

We treat companies and teams with a negative background with distrust. For startup leaders, failures are good, because a startup founder without failures is not a startup founder. But in direct investments, companies are at a different level of maturity, and I would be wary if a team that had previously bankrupted two plants came to me for money.

If during negotiations we see that the CEO is no longer up to their duties, we discuss their replacement in advance. We do not engage in direct management of the company but work at the corporate level: board of directors, shareholders’ meeting, control over the company’s budget. Starting a shareholder conflict right upon entering the company—for us, it’s easier not to invest than to take on such additional risks. We have had cases where deals fell through because we could not agree on the further actions of a specific CEO or shareholder. In some cases, we set conditions for our partners that the leader needs to be replaced if we see their mismatch with the company’s development level.

How RUSNANO invests

For us, it is very important to have a clear exit strategy from the investment. There are many options here. For example, in September 2012, we opened a section for the production of welded precision tubes from stainless steels and alloys at the enterprise TMK-INOX, part of the Tube Metallurgical Company. The section was completely tied to TMK resources, so our only exit was to sell it to the company itself. We agreed even upon entry that TMK would have a call option to purchase. Recently, we had to refuse another similar deal because we could not agree on the option.

There is a case that perfectly explains why we approach this issue so meticulously. Our investment is the company Monocrystal, the largest producer in the global sapphire market, occupying 50% of the world sapphire market for light-emitting diodes. But we have a 5% stake. We entered before the planned IPO, but in 2012 there was an overproduction crisis, a protracted struggle for the market with Chinese producers—in the end, the IPO had to be put on hold. How to exit with this 5% stake is unclear; it is so small that, essentially, there is no one to sell it to.

Checklist: what Rosnano looks at before a potential investment

  • Team. They evaluate their engagement, experience, and readiness for growth. Direct investments have their own advantage: usually, people who come for funding have already gone through several crises, coped with growth challenges, so their experience can be assessed.
  • Financial aspect. How the company values itself, what the market capacity is, and the potential for growth. In this case, you take the applicant’s valuation, divide it by three, and get an optimistic forecast.
  • Deal structure. It is very important how Rosnano will exit the investment—whether it will be an IPO, a separate buyer, or an option for a specific company.

We never buy out shares from owners; we invest in business development. Therefore, companies that approach us should know exactly what they want and how much it costs. If a high-tech business wants to build a new facility for, say, a billion rubles—we conduct our own valuation, analyze the sales market, build a financial model, and determine how feasible it is. When companies come to us from an industry where our expertise is not strong enough, we purchase an expert study. And if everything is satisfactory, negotiations on the deal begin: what share and what corporate rights we will receive, whether we invest in a separate facility or the parent company, and what the exit strategy will be.

Previously, it took an average of one year from the first contact to the transfer of funds. During that time, scientific-technical and technological expert reviews were conducted, the project was reviewed by the scientific-technical council, and documents were prepared. Now, in the new funds, the process is structured differently, so we manage it in about six months—many procedures at JSC Rosnano were more complex.

For me, there is a clear red flag—when we are offered chocolate-like deal terms. For example, the company values itself exactly at market value, not twice as high, is immediately ready for options, and is even willing to negotiate further. In my experience, an adequate valuation from the owner is 1.5–2 times above the market, after which you negotiate. But when they are ready for a price twice below market, it means you are missing something. It could be off-balance-sheet liabilities that will surface after the deal. Or worn-out equipment that needs replacement in a year, requiring as much investment in repairs as you have already put in. In this regard, I have a conservative approach: if you see something unclear and the partner cannot explain it—it’s better to stay away.

BLITZ

— A role model in the investment business?
— Warren Buffett. A long-term investor with a systematic approach and no fuss.
— The most successful project in your portfolio?
— «Danaflex-Nano», high-barrier polymer flexible packaging. We built a second facility, purchased the best equipment, became No. 1 in Russia in 6 years, and sold our stake to the owner.
— The most promising technology?
— AI and Big Data. The technology has reached the plateau of productivity and has real business applications. On a global scale, I would name software digital technologies that are transferring the physical world into the cybernetic one.
— The main event in the Russian venture market over the past 5 years?
— Sanctions — in a negative sense. In a positive sense — the fact that the market has moved from the hype stage to the stage of normal development and is actively thriving. (Source: Inc.)

About Dmitry Pimkin

Dmitry Alexandrovich Pimkin graduated with honors from the Faculty of Economics at the Moscow Aviation Institute in 2003.

  • From 2001 to 2002, he worked at the Publishing House “Securities Market” on the creation of the Magazine “Management of Company”.
  • From 2002 to 2004, he was an employee of Ernst & Young.
  • From 2004 to 2008, he worked at Promsvyazcapital, where he held various positions, including Investment Director in his final years. He participated in building several innovative investment projects from scratch, as well as in the development of existing companies within the group.
  • From 2008 to March 2011 — Senior Investment Manager and Managing Director at SC Rusnanotech.
  • From March 2011 to 2016 — Managing Director for Investment Activities, member of the Investment Committee of the Management Board of RUSNANO.
  • From January 2017 to July 2019 — Senior Managing Director for Investment Activities of the Investment Division at RUSNANO Management Company.
  • Since July 2019 — Deputy Chairman of the Management Board, Head of the Investment Division at RUSNANO Management Company LLC.
  • Dmitry is a member of the Association of Independent Directors, and holds an international director’s certificate from the IoD (Certificate in Company Direction).