Deal in focus: Guard Capital et al. invest $3m in Doktor na Rabote

The capital injection by the three firms shows the resilience of Russia's venture capitalists. As harsher sanctions imposed on the country by the west look imminent, Russia's venture capital scene will no doubt be regarded as toxic by more western venture firms – undoing the months of increasing investment in the country by a larger pool of European firms.

"Due to the Crimea crisis, European [VC] companies are decreasing their activity in Russia," says Guard investment manager Vladimir Grigaroshenko. But he is confident that the country's venture capital scene will pick up again in the future: "We think firms will restore their activity in several months when the political dispute blows out. Russia's venture industry is in its early stages right now, but has very strong potential."

Surprisingly, however, the Crimea crisis does not appear to have killed Russia's burgeoning venture capital industry completely. While a hefty decrease in activity in Russia's venture capital scene is inevitable, there is still hope for the companies that are not currently looking to expand out of their domestic market or further afield than neighbouring CIS countries.

No place like home
Given Russia's substantial domestic population – almost 144 million – companies that cater only to their local market still have the opportunity to experience substantial growth. The country's biggest success story, search engine Yandex, is testament to the potential of a Russia- or Russia-and-CIS-focused business strategy.

Doktor na Rabote is one of those domestically-focused companies. The business operates the professional network site doktornarabote.ru for Russian doctors, with more than a quarter of all doctors in Russia registered as users of the site, according to the company.

Doktor na Rabote plans on using the fresh funding to attract new members; its aim is to have half of the doctors in Russia as members of its site. As of February this year, the company counted more than 209,000 physicians registered on its network.

Guard, which focuses its investments on the Russian and CIS markets, was a new investor in this funding round for Doktor na Rabote and joined existing backers Aurora and BCD. A portion of the funds supplied by the three firms went towards buying out the minority stakes previously held by Doktor na Rabote's initial investors – a syndicate of business angels.

The capital injection by the three venture firms valued the company at a respectable $16.5m.

Doctors on call
As well as its efforts to attract a larger portion of Russia's doctor populace, Doktor na Rabote also plans on using the funds to prioritise the growth of its mobile offering, as a third of its current user base use mobile devices to access the doktornarabote.ru network.

Alongside doktornarabote.ru, the company also owns and operates Russian medical-student social network Medcampus – currently with more than 100,000 users – and Smartpharma, a Russian network for pharmacists.

Doktor na Rabote was founded in 2009. The Moscow-headquartered company generated revenues of approximately $1.5m in 2013. Stanislav Sazhin is its founder and CEO.

People
Guard Capital – Pavel Yunin, Vladimir Grigorashenko
Aurora Venture Capital – Vsevolod Topolyansky
Bright Capital Digital – Gleb Kaplun

Advisers
Equity – Althaus Consulting (Corporate finance); Orrick (Legal).

This deal was originally covered on Friday 21 March.

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• Deal in focus