Investors are lining up for a piece of Russia’s soaring internet market, pouring as much as $75 million into Russia’s largest online classified site Avito.ru this year.
Avito.ru, Russia’s answer to Craiglist, raised one of the biggest funding rounds from local private equity firm Baring Vostok and Facebook stake holder the US-based Accel Partners, as well as existing investors Kinnevik and Northzone, according to a company statement.
GP Bullhound, the tech-focused investment bank, was financial advisor of Avito.ru on the deal.
“With the additional funds, Avito now has more resources to support small and medium-sized businesses using our service in addition to catering to individuals,” Filip Engelbert, a co-founder and executive director at Avito, said.
Avito.ru is interested in attracting small businesses to pay for hosting online stores on the website, while individuals list their items for free.
Launched in 2007, Avito.ru has become the largest classified website in Russia with 30 million users. Every month that’s more than a third of all Russia’s internet users visiting the site, according to data from media researcher TNS Global. Avito.ru says about 6 million new items are added per month.
The total value of items traded on the site this year is expected to top 3% of Russian GDP, according to Aviito’s data. Meanwhile most of the deals are carried out offline in cash with few completed through online transactions. It poses a challenge for Avito.ru to expand its business abroad.
Accel Partners has already tapped the growing Russian internet market as it previously invested in KupiVIP, an online shopping club, and Ostrovok, a travel site. Meanwhile Moscow-based Baring Vostok backed Ozon, Russia’s largest online retailer which raised a $100 million funding last year, and Yandex, the country’s leading search engine.