HomeMe.ru, a website offering furniture and some home accessories, announced last week it has raised $5 million in a Series A round of financing from Russian venture funds AddVenture and ABRT, as well as from Mangrove Capital Partners, a fund headquartered in Luxembourg.
Launched in early 2012, HomeMe.ru currently has an assortment of 2,000 stock keeping units (SKUs) in the lower to medium price segments, founder Oleg Pai told East-West Digital News.
Using the existing delivery and assembly capacities of Pai’s other furniture businesses, HomeMe.ru serves Moscow and its surroundings. As early as next year, the company plans to deploy in five more large Russian cities, including St. Petersburg.
A $7 billion market
The site expects to reach a turnover of $3 million by the end of the year. “In the long term, HomeMe.ru has a chance to reach over $100 million of turnover,” believes AddVenture partner Maxim Medvedev.
The Russian furniture market is estimated at $7 billion, of which the online segment represents approximately 1% – compared to 9% in the US and 13% in Germany, according to HomeMe.ru.
The online furniture business has developed quickly in Russia over the last few years. Stolplit.ru, a furniture company, has a strong online presence, while Mebelrama.ru, a site backed by German business incubator Rocket Internet, currently claims an assortment of 16,000 SKUs.
Also competing in this market segment are Domosti.ru and Homefair.ru, two sites whose offers include furniture as well as a wide range of items for the home and garden accessories.
Last but not least, click-and-mortar retailer Enter.ru, launched last year, has a strong furniture section offering 2,185 items. Backed by consumer electronics giant Svyaznoy, Enter.ru already serves a dozen of larges cities in Russia.
A Russian self-made man story
HomeMe.ru is the fourth furniture business for Oleg Pai, a graduate of the Moscow Railways University (MIIT). His first company, Interio Star, which supplies custom-made furniture to fashionable clubs and restaurants, has a turnover in excess of $1 million.
In a mere three years, Pai then created four furniture factories from scratch, which now employ 350 people. With distribution networks all over Russia, the furniture manufacturing company, named Stilistica, claims a monthly turnover of $50 million.
The serial entrepreneur’s first online company, Mysofashop.ru, started in April 2011.
- RUSSIAN E-COMMERCE REPORT 2012 – The total volume of Russian online retail reached 310 billion rubles, a little more than $10 billion, in 2011, up 25% from the previous year. EWDN’s research study of Russian e-commerce, which includes a review of related venture deals over the last two years, will be available soon. To receive free insights or to order the full version, please contact us at [email protected].
