Russian internet retailing attracts new $100 million investment
Ru-Net, the venture capital vehicle of Leonid Boguslavsky, Index Ventures, Alpha Associates and Japanese on line retailer Rakuten, have heavily invested into Ozon.ru, with Vedomosti reporting on Thursday that ru-Net is bringing more than half the total investment.
Máel Gave, CEO at Ozon.ru, told the newspaper that al investors have received minority shares in the company and that Ozon’s main shareholder – Baring Vostok Private Equity Fund – didn’t participate in the deal.
This investment is the highest the Russian electronic commerce market has seen, says Maxim Faldin, Wikimart founder, adding that $55 million investment into KupiVIP in April 2011 was the last big outlay.
Investacafe analyst, Ilya Rachenkov, says that with new companies always coming to the market new investment is vital for Ozon.ru.
“Investment into Ozon is likely to be due to growing competition in Russia’s market of electronic trade – the company might need additional funds to hold its position in the market. It is likely that in the coming years the Company will remain non – public, otherwise there would not have been any point in holding an open placement of additional shares.”
Faldin also notes that Japan’s Rakuten is one of the world leaders in electronic commerce, and that it usually invests strategically, with its experience very useful for a Russian colleague.
“Japanese internet retailer Rakuten took place in the book buy out, which could indirectly point to foreign investors interest in Russian market. However, it’s already quite difficult to enter now, as there is already tight competition.”