The Ministry of Digital Development proposes to allocate 27 billion rubles. for grants to IT startups until 2030

The Ministry of Digital Development proposes to allocate 27 billion rubles by 2030. for grants to IT startups and allow them to participate in government procurement. But experts emphasize that grants will not cover the market’s needs for mature solutions, and allowing startups to participate in government procurement threatens the emergence of low-quality products in government systems.

“Kommersant” got acquainted with the presentation of the head of the Ministry of Digital Development, Maksut Shadayev, presented on November 21 at a strategic session in the government on the national project “Data Economy” (estimated at 1.51 trillion rubles until 2030). Part of the document is devoted to the development of the IT startup market in Russia, including through grant support. The document clarifies that the system includes funds for prototype development, product creation and launch on the market, promotion abroad, as well as providing funds to customers to compensate 80% of implementation costs.

Grant support for small innovative enterprises, including IT startups, is provided by the Ministry of Digital Development based on the results of competitive selections (within the framework of the Digital Economy national project) conducted by the Innovation Promotion Fund in accordance with the government decree of May 3, 2019.

• From the data of the Ministry of Digital Development it follows that in 2022, 362 projects were supported for a total amount of 4.7 billion rubles, while in 2023 – only 45 projects worth 600 million rubles.
• In total, during the program’s operation since 2019, 811 projects worth RUB 10.13 billion have been supported.

The decrease in funding in 2022 may be due to additional checks as part of the detention of Deputy Head of the Ministry of Digital Development Maxim Parshin, Kommersant’s interlocutor in the IT market believes: “On suspicion of receiving a bribe, the ministry suspended the issuance of grants in the IT sector in July until September, however this applied only to projects within the framework of import substitution (see “Kommersant” dated July 17)”. At the same time, most of the projects that remained in the country last year have already received support in 2022, the source believes.

Since the beginning of hostilities in Ukraine, the Russian venture capital market as a whole has decreased by almost four times (see “Kommersant” dated September 19, 2022). Then experts explained the decrease by “increased investment risk.” It began to recover only in the third quarter of 2023, but so far only in terms of the number of transactions (see “Kommersant” dated October 5).

• Based on the document, by 2030 grant support for startups should reach 27 billion rubles. with an annual investment of 4.5 billion rubles, that is, return to the 2022 level.
• In general, by 2030, the ministry expects to support at least 1 thousand startups that will release at least 2 thousand new implemented solutions and products.

It is planned to increase sales of solutions and products through the public sector. Now, the presentation notes, startups, even those that have received grants, “do not have access to the contract market of state companies and government agencies” because they “do not meet the maturity requirements.”

To solve the problem, it is proposed to provide the opportunity, within the framework of 44-FZ and 223-FZ, to conclude contracts up to 10 million rubles. with startups that received grant support. In general, when implementing the strategy, the Ministry of Digital Development expects the emergence of five new “national champions” (with revenue of more than 500 million rubles) and one “unicorn” (with revenue of more than 1 billion rubles) from the supported startups by 2035, as well as revenue from sales of developed IT solutions at the level of 60 billion rubles.

The Ministry of Digital Development told Kommersant that all initiatives that should form the basis of the new national project are being developed. “The national project itself will start in 2025, after the completion of the current Digital Economy program. We hope that the continuity of approaches to selecting startup projects will generally remain,” the ministry added.

Grants themselves do not cover the market’s need for mature solutions that can have a business effect, although they help strengthen competitiveness in the early stages, emphasizes Dmitry Kurin, CEO of MTS StartUp Hub.

The expert notes that the entry into government procurement of early solutions may create a precedent when low-quality products appear in the IT circuit of state-owned companies: “We need to create a system for safe selection of solutions from young players on the basis of state corporations.”

The state’s demand for IT solutions is formed in the logic of import substitution, explains Konstantin Gibalo, venture partner of the Voskhod fund: “That is, 99% of it is not about innovation, technology or new business models, but about the replacement of previously widely used foreign products. The development of replacement products is always the business of large IT players and integrators. They either invest themselves or buy small players, and as a result, an imbalance has formed in the market.” The balance, according to the expert, will emerge after the state’s main needs for software are covered by large players, and private investment goes into innovative products with scaling potential abroad.

Tatiana Isakova