In yet another step in its international expansion, Ru-Net, a major Russian venture fund, has invested $17 million in Freecultr.com and BeStylish.com, two Indian e-commerce companies.
The news on the investment in Freecultr – a website that offers its own apparels brands – was initially reported earlier this month by Iamwire, an online publication dedicated to the Indian Internet and mobile markets.
“With its high burn rate and very low revenue, certainly Freecultr – which initially raised $4 million from Sequoia and a very small contribution from its original promoter – needed a lot of cash and soon,” Iamwire wrote.
An unnamed “source close to the deal” told Russian business daily Kommersant quite the opposite: Freecultr, a highly profitable company whose monthly turnover grew three-fold over the last three months, was interested in Ru-Net’s e-commerce expertise rather than actually needing Ru-Net’s money, that source asserted.
Kommersant reported that Freecultr’s round of financing totaled $9 million – of which Ru-Net brought $7 million and Sequoia $2 million – based on a $18 million valuation.
From Russia to America to South-East Asia
Ru-Net also invested $10 million in BeStylish, a major footwear retailer on the Indian e-commerce scene, according to Kommersant. The company has deployed Internet kiosks across the country, making available an assortment that is much larger than that of traditional offline shops in India’s regions. These kiosks are also used as pick-up points for delivery.
Ru-Net already invested heavily in Vietnam last year, taking part in a $60 million round of financing to launch MJ Group, a new e-commerce company.
According to the Iamwire, Ru-Net was looking to invest an additional $50 million in the South-East Asian Market “with $5 to $20 million in a single transaction, preferably in the areas of e-commerce, online travel, online entertainment, and social gaming, and preferably in startups which have already received some amount of seed funding.”
One of the most established players on the Russian venture scene, Ru-Net has stakes in several market leaders including search company Yandex, online retailer Ozon, and daily site Biglion.ru. Last year, Ru-Net made its funds available to US tech startups through a dedicated entity, RTP Ventures, which has a representative office in New York City.
Ru-Net declined to comment on its latest Indian developments.
