The networking giant announced a $60 million investment in a VC fund that will bankroll Russian startups involved in technologies that generate demand for Cisco’s products and services.

The fund will be co-managed by Cisco and Almaz Capital Partners, a VC firm with offices in both the United States and Russia that specializes in investments in Russia and the Commonwealth of Independent States.

The fund will focus on Russian startups in the technology, media, and telecommunications sectors.

“Russia has a very robust math and computer science history that drives front end innovation,” said Hilton Romanski, Cisco’s vice president of global corporate development. “It is a combination of government-sponsored and defense research and a strong entrepreneurial spirit.”

San Jose, California-based Cisco once invested almost exclusively in Silicon Valley firms and on-campus startups involved in technologies closely related to Cisco’s core business.

But in the last year Cisco has begun extending both the geographical and technological reach of its $2 billion VC investment budget to places such as Russia, China, India, Israel, and Eastern Europe. (see Cisco Seeks Startups in Central and Eastern Europe)

Cisco announced a number of investments in these regions including an $18 million investment in Ozon, Russia’s Amazon.com, which was led by Index ventures.

Cisco also took a $50 million stake in China Communications Services, a Chinese telecommunications services company.

The networking company has traditionally avoided investments in application software. But as social networks and software-as-a-service continue to blur the line between networking hardware and software, Cisco’s investment focus has widened.

Last year Cisco invested in a number of Silicon Valley-based software companies including social-networking technology company Five Across and web computing specialist Reactivity. But innovation in software is certainly not limited to Silicon Valley. (see Cisco Gets Social)

By investing in startups in countries such as Russia, Cisco will not only fuel international demand for its products but also stay abreast of new technology or investment trends in those countries, Mr. Romanski said.