By Ben Rooney for The Wall Street Journal
Russia’s largest online classified site Avito, has landed a $75 million funding, one of the biggest funding rounds this year.
Led by Baring Vostok Private Equity, the round was joined by Accel Partners, and existing investors Kinnevik and Northzone, and will be used to drive marketing across Russia according to Jonas Nordlander, CEO and co-founder of AVITO.ru.
“Think of us like Craigslist,” said Mr. Nordlander. “Essentially it is a bulletin board where people meet to sell everything from cars to cellphones. There hasn’t really been a marketplace like this in Russia.”
The site is free both to place ads, and to read them. The company makes money by selling premium services to advertisers and to selling shop solutions to small entrepreneurs.
Launched in October 2008, according to TNS Index’s research data 40% of Russia’s internet users visit the website every month, placing it in the top ten largest online properties in the country.
The round is the company’s third; an early seed round, and then two years ago a $27 million A round.
“This business model is a pretty cash-intensive model. We have used a combination of TV and online advertising as an effective way of building traffic.” This latest funding will be used to drive marketing across Russia. According to Mr. Nordlander there are no plans yet for overseas expansion. “We have a small operation in Ukraine.”
“Russia is such a big country. Every city has to have its own campaign.”
Mr. Nordlander was previously CEO of Tradera, one of the leading online commerce services in Sweden, before it was bought by eBay in 2006. Invited to Russia by DST founder Yuri Milner to run one of his companies, he turned down Mr. Milner, but was attracted to Russia.
“I had a contract from eBay that said I was only allowed to set up a company in two countries: Indonesia and Russia.”
Avito attracts close to 30 million monthly unique users who browse a total of more than 2 billion pages and spend on average one hour a month on the site, Mr. Nordlander said.
More than 6 million new items are added every month by over 3 million users. Overall, in excess of 10 million people have listed items for sale on AVITO.ru. The cumulative value of items traded on the site this year is expected to top 3% of the Russian GDP.
The original article can be found here.