Avito, Russia’s leading online classifieds site, is preparing for an IPO, co-founder and CEO Jonas Nordlander stated last week.
Avito is “in the preparation for the simple reason that we want to have options if it at some point makes sense for the business and shareholders to go public,” Bloomberg quoted him as saying.
Avito has not hired any advisers yet, he added. However, the company has adapted internal controls and procedures to meet listing requirements for larger markets, including the US, and has met with investors to raise the company’s profile, Nordlander said in an interview with Bloomberg.
A Russo-Swedish success story
Founded in 2007 by Swedish businessmen Filip Engelbert and Jonas Nordlander, Avito grew successfully from its early days. In 2011, Swedish investment company Vostok Nafta Investment, one of its early investors, called it the “real romance” of its portfolio.
In May 2012, Avito.ru secured $75 million from Baring Vostok Private Equity Fund IV and Accel Partners as well as from existing investors Kinnevik and Northzone.
In March 2013, Avito merged with its competitors Slando.ru and OLX.ru, creating the fifth most popular Russian website and one of the world’s top classifieds websites. As part of the deal, valued at more than $570 million, Naspers — the South African holding company which owned Slando.ru and OLX.ru — invested $50 million in cash into Avito in exchange for a stake in the new group.
Over the past years, the company kept growing amid the crisis that hit the Russian economy in 2014-2015.
Avito’s revenue reached 1.57 billion rubles ($24 million) in the second quarter of this year, up 47% in one year. Avito had an adjusted EBITDA margin of 50.5%, according to Vostok New Ventures, which valued the company at about $2 billion at the end of June, according to Bloomberg.
By comparison, Avito’s revenues amounted to just $8.5 million in 2011. The company was then valued at $158.73 million, according to the financial reports of one of its shareholders.
TNS estimated Avito.ru’s monthly traffic at 25.7 million Russian users between 12 and 64 years of age in July 2015.
An acquisition to improve delivery conditions
Avito also announced last week that it took control logistics service aggregator CheckOut, buying the shares of venture investors Altair VC and Edison Venture Capital for an undisclosed amount.
The CheckOut service allows online shoppers to choose the quickest and cheapest way to ship goods across the country. In addition to its C2C activity, Avito allows thousands of Russian online stores to sell and promote their goods. By acquiring CheckOut, Avito aims to improve delivery conditions.
“Avito has always been working hard to provide better services to its users,” commented the company’s press service in an exchange with East-West Digital News. “This acquisition is the first step towards providing delivery services. It was made for the purpose of guaranteeing a long-term partnership with CheckOut.”
“We might attract more partners for delivery purposes in the future,” the company added, while declining to elaborate further on its e-commerce strategy.
Last year Yandex.Market, the marketplace of Russia’s search giant Yandex, made a similar move with an investment in MultiShip. The integration of this logistics aggregator failed, however, and Yandex developed its delivery offer further under its own brand.
