After receiving a $40 million capital injection last year, Russian online video company ivi.ru has plans to go public this year, according to Kommersant. Unnamed industry sources told the business daily last week that the operation could take place on the NASDAQ by the end of this year with JP Morgan Chase underwriting the IPO.
The ivi.ru press service declined to comment on what it calls “rumors” – but, as reminded by Kommersant, these rumors are in line with previous statements from the company’s CEO Oleg Tumanov. In 2018 he told online publication TJournal an IPO could take place by 2020 “if the ruble will not fall again.”
Russian billionaire Leonid Boguslavsky, whose venture firm Ru-Net (now known as RTP Global) backed ivi.ru at the early stage, told Kommersant that the decision to go public “is not taken yet.”
Russia’s largest video streaming platform in terms of revenue, ivi.ru could be valued at more than $700 million, according to analysts who talked with Kommersant.
Small market, strong growth
The Russian online video market exceeded 17 billion rubles in 2019 (around $264 million at the average exchange rate of the year), according to preliminary estimates from TMT Consulting. In 2018, ivi, Okko and Amediateka led the market with marketshares of 36%, 19% and 9% respectively.
According to another estimate by Telecom Daily (cited by Vedomosti), Russian online video platforms saw their revenues grow to 10.6 billion rubles in the first half of 2019 (around $163 million), up 44.3% from the same period in 2018. By the end of 2019, these platforms – including foreign ones: YouTube, iTunes, Google Play – were expected to earn about 21.5 billion rubles ($334 million).
Seven years ago, this market did not exceed 1 billion rubles (see EWDN’s industry report).
At the beginning, the business model of Russian online video platform relied primarily on advertising revenues. However, two years ago, user-generated revenues exceeded advertising revenues. Since then, the share of user-generated revenues has grown constantly, Vedomosti noted. In the first half of 2019, this share reached 70% of total revenues (7.3 billion rubles, up 70% from H1 2018), while advertising revenue generated just 3.3 billion rubles (up 11%).
