SERIAL ENTREPRENEUR AND MASSACHUSETTS Institute of Technology professor Robert Langer is a biotechnology legend whose half dozen Boston-area start-up companies don’t lack for investors. So Langer surprised the high-tech world late last year when he announced his newest partner: the Russian government. 

Not the Kremlin, exactly. Rusnano, a state-backed investment firm, put up half of a financing round that poured $94.5 million into two shops where Langer is a core investor: Selecta Biosciences, which is developing a genetically engineered drug to block the addictive effects of nicotine, and BIND Biosciences, working on a potentially blockbuster cancer drug. Rusnano also agreed to invest $26 million in a joint venture with Cleveland BioLabs, another U.S. start-up that is looking to engineer oncological treatments.

The U.S. investments were a first for Rusnano, founded in 2007 to seed tech companies within Russia, but they were far from its biggest international collaborations of 2011. Last May, Rusnano announced a $300 million joint venture with Crocus Technology, a French-founded pioneer of the magnetic random access memory technology that may push coming generations of microchips. And in December it joined Japan’s Nippon Sheet Glass Co. and the European Bank for Reconstruction and Development in a €295 million ($373 million) project to produce energy-saving glass.

The Russians have plenty of rubles to shower on promising scientific outfits abroad. Vladimir Putin and company have staked Rusnano, run by onetime privatization czar Anatoly Chubais, to $9 billion in capital and state-guaranteed debt. About $3 billion of that is committed, says Dmitriy Lisenkov, the St. Petersburg–born, U.S.-educated managing director who has overseen most of the foreign investments.

The firm offers terms that private equity investors without state backing can’t usually match, Lisenkov, 45, says. “Strategic investors coming in with our level of funding will generally want control of the company, or at least the [intellectual property].” 

By contrast, Rusnano sets up joint ventures or takes a minority equity stake as long as beneficiaries agree to move some operations to Russia. That’s a win-win for Scott Minick, president and CEO of BIND, who is scouting locations for a Russian R&D center. “Expanding into Russia wasn’t something I was actively thinking about,” Minick recalls. “But they have some of the best polymer chemists in the world.”

All three of Rusnano’s new U.S. biotech partners plan to use their Russian foothold to expand and accelerate clinical trials of experimental medicines. Winning approval of a new product from the U.S. Food and Drug Administration can be a 15-year slog that young companies can scarcely afford, explains Michael Fonstein, a Russian émigré chemist who is president and CEO of Cleveland BioLabs. In Russia the drug can go to market in three years, then garner performance data that might shorten the FDA marathon.

Rusnano’s market-savvy investment team confounds expectations of a clunky post-Communist bureaucracy, Fonstein observes. “When we first encountered them a few years ago, they were a very rigid partner,” he says. “But they learned to be more flexible quickly.” 

Chubais has always been a maverick in Russia’s public sector. He was at the center of the 1990s’ shock economic reforms, first as director of state property, then as finance minister and chief of staff to president Boris Yeltsin. In 1998 he became CEO of national utility Unified Energy System, pushing through changes that led to the privatization of most power generation. Chubais’s zeal and track record have lured internationally experienced financiers like Lisenkov, who earned an MBA at Baruch College in New York, then worked as a broker at UBS before returning home in 2003 to head business development and exit strategies at Russian Technology Fund, a venture capital group in St. Petersburg. Lisenkov joined Rusnano in 2008.

Russia has several attractions for Western tech entrepreneurs struggling with diminished risk appetite back home. A big one is the Skolkovo Innovation Center, tasked by the state with building a Slavic Silicon Valley from scratch in what is now a meadow outside the Moscow city line. Skolkovo wields $1.2 billion in research grants for companies willing to put down roots there. One of its advisory board members: MIT’s Langer.  •  •