(Reuters) – A $50 million venture capital fund is being launched to invest in early-stage Russian internet consumer businesses, seeking to take advantage of an increase in online usage and discretionary spending in the country.

Frontier Ventures has been started up by Dmitry Alimov, who previously ran a venture fund called ru-Net.

It is looking to invest in companies such as online travel, online financial services and mobile applications, according to its website.

“We are working on a few deals and hope to close the first in the first half of this year,” said founder and managing partner Alimov.

“We are targeting three to five deals this year (and are looking to invest) up to $10 million in each,” he told Reuters. Companies would be targeted at a “relatively early stage”.

Alimov said the proportion of truly active internet users in Russia is only 10-15 percent of the population, highlighting potential for significant growth.

Rising borrowing and falling savings in Russia suggest that consumption is set to increase, analysts at Renaissance Capital wrote in a recent research note to clients.

Alimov has invested in internet companies including online video provider ivi.ru and group purchasing site Biglion.ru. (Reporting By Megan Davies; Editing by David Hulmes)