The recently created venture arm of Bank Saint Peterburg has made its first investment — a capital injection of 200 million rubles, or some $3.2 million at the current exchange rate — in Babadu, a major online retailer of children’s goods.
The news was reported earlier this month by Russian venture blog Firrma.ru based on exchanges with Target Global, an earlier investor in Babadu.
Babadu plans to invest the funding to fuel technological development, operations and marketing, as well as to enlarge its assortment.
In 2013, Babadu raised an undisclosed amount from Target Global. The next year, the site received $2.9 million from the IIDF (FRII in Russian), an investment fund launched in 2013 with support from the Russian authorities.
Commenting on the site’s record since 2013, General Partner at Target Global Mike Lobanov said: “The segment of children’s goods is growing much faster than the e-commerce market as a whole. Babadu has increased its revenue more than ten-fold and has reached the annual turnover of one billion rubles [$17.4 million at the current exchange rate], since 2013. This is a good result, taking into account that only about 50 Internet stores in Russia have such a turnover.”
“Children’s goods has been one of the most stable categories amid the crisis, showing a solid growth in 2014-2015. You don’t cut down your expenses when it comes to children,” the investor added.
Babadu claims that repeat orders account for 40% of its sales revenue. To offer lower prices, the online retailer sells large-size items directly from manufacturer warehouses, and has enhanced its SEO performance.
