Naspers’s classifieds business, OLX Group, announced Friday that it took full control of Avito.ru, Russia’s number one classifieds site, boosting its stake from 70.4% to 99.6%.
Among the minority shareholders exiting the company is Swedish investment firm Vostok New Ventures (VNV, previously known as Vostok Nafta Investment), which will get gross proceeds of $540 million from the transaction. The Avito management holds the remaining 0.4%.
The $1.16 billion deal valued Avito at $3.85 billion – up from $2.7 billion in 2015, when Naspers acquired a controlling stake in the company.
“Avito is the leading online classifieds player in Russia and our decision to increase our stake reflects our belief in the long-term prospects of this great business and the Russian internet market,” stated Naspers CEO Bob van Dijk.
“This investment further strengthens our global position in online classifieds, a core focus for Naspers alongside online food delivery and fintech,” he added.
A Russo-Swedish success story
One of the most successful Internet companies in Russia, Avito was founded in 2007 by Swedish businessmen Filip Engelbert and Jonas Nordlander. In 2011, 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 — which owned Slando.ru and OLX.ru — invested $50 million in cash into Avito in exchange for a stake in the new group.
In October 2015, Naspers spent $1.2 billion to increase its stake from 17.4% to 67.9%, valuing Avito at some $2.7 billion. Kinnevik, Accel Partner and Northzone fully exited the business through this deal, which was one of the largest European VC-backed company exits ever.
Crisis-resilient business
The company continued growing in spite of the economic crisis which hit Russia in 2014-2015. It expanded into classifieds verticals, in particular general goods, auto, real estate (including Domofond.ru), jobs and services.
The site’s current growth is “driven by enhanced product features, strong vertical traction and working closely with professional advertisers,” according to Naspers.
Avito.ru generated $162 million in H1 2018, up 31% year-on-year, with “robust profit margins.”
Today, Avito claims to publish 400,000 new classifieds every day and process 120 new deals per minute. The number of classifieds on the platform exceeds 48 million.
According to SimilarWeb, the site generated more than 286 million visits in December 2018 – far above any other classifieds site in Russia, and making Avito Russia’s eighth most visited website.
