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Intel Capital crosses into Russia

The chipmaker says it will invest in a range of Russian and Ukrainian tech companies, in a move to take advantage of a hot new tech frontier.

Intel Capital has begun to operate in Russia and has placed its first investments there.

The planned investment, announced Thursday, extends the Santa Clara, Calif., chipmaker's involvement in Russia. Some of the complex math underlying software coming out of Intel's labs in recent years was developed in its research center in Nizhny Novgorod.

"Russia is a critical market for Intel," Claude Leglise, vice president of the company's venture capital arm, said in a statement. "Intel Capital has invested in companies in emerging markets worldwide to support Intel's strategic objectives. A wealth of technology expertise distinguishes Russia from most other emerging markets, and we are excited about the opportunities to invest in the unique and innovative technologies developed here."

Russia and the rest of Eastern Europe are shaping up to be one of the hot new frontiers for technology companies, according to several technology executives. Sales of PCs, servers and other computing equipment continue to grow at a rapid rate in these markets, a trend that has benefited local manufacturers such as Kraftway, Russia's leading PC maker. Additionally, universities such as Moscow State Technical University are often flush with underemployed Ph.D. scientists and engineers.

Moscow-based Ru-Net Holdings, which invests in technology companies such as system integrator TopS Business Integrator Group, has received the first Russian funding from Intel's venture capital arm. The money will be used to help TopS develop products, based around Intel silicon, for Russian corporations.

In addition to system integrators, Intel said it will look to invest in companies specializing in software, new semiconductor materials, nanotechnology and wireless. The company will make investments in companies in both Russia and Ukraine.

Intel Capital currently has investments in approximately 475 companies. The net worth of the group's portfolio is around $870 million. Financial details of the Russian investment were not disclosed.