The recent series of large scale investment in Russian e-commerce sites continues with Zoom Capital’s $30 million investment in Vseinstrumenti.ru, a website offering tools and appliances for use in homes and gardens as well as workshops and construction sites.
Vseinstrumenti.ru (“All instruments” or “all tools” in Russian) is one of those Russian online retailers that are little known in international business circles, but that have asserted themselves as leaders on the domestic market. The site currently stands as the 10th largest Russian online retailer of physical goods, according to EWDN’s recent ranking.
Founded in 2007 by Alexander Goltsov, Nikolai Gudovsky and Viktor Kuznetsov, who were 4th year students of the prestigious Moscow Institute of Physics and Technology at the time, Vseinstrumenti.ru has grown to more than 600 employees.
Under current plans, the company’s product assortment, which currently includes 30,000 SKUs from 300 international and Russian brands, will expand to no fewer than 150,000 items by 2014.
The company also has offline stores where customers can choose, test, and buy products, pick-up online orders, and receive professional advice. The network has been deployed in more than 30 major and medium-sized Russian cities. Vseinstrumenti.ru plans to cover 70 more cities in 2013.
Users from the regions already generate 30% of the site’s total sales, which reached $120 million in 2011 and could double this year. The company aims to reach the $1 billion mark by 2015, positioning itself as the online DIY market leader.
The founders initially invested $5,000 and then the business grew without external financing. In early 2012, Vseinstrumenti.ru received from Zoom a fraction of the $30 million investment, but the investors’ identity then remained undisclosed.
The funding is intended to be spent on improving the site’s IT plaform and logistics and accelerating its regional development. As much as $4 million is to be spent on marketing campaigns.
Zoom Capital was founded earlier this year by Gregory Berenstein and Vadim Kurin. The asset management company has already invested $1.5 million in Vsevcredit.ru, a credit service for online purchases, and $15 million in microcredit company Viva Dengi. In 2011, Berenstein and Kurin sold NetByNet, a fixed broadband Internet, digital TV and IP telephony operator, to mobile operator Megafon.
- 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% at least from the previous year. EWDN has published an in-depth research on Russian e-commerce, which includes a case study of Vseinstrumenti.ru as well as a review Russia’s leading e-merchants and their financing over the last two years. To receive free insights or to order the full version, please contact us at [email protected].
