Russian online video major ivi.ru has attracted debt financing for the first time. As reported by business daily Vedomosti, the company received a six-year venture loan from Alfa Bank, amounting to 3.7 billion rubles (some $54 million at the current exchange rate, a considerable sum by local standards).
In addition to the share collateral, the bank has been granted an option to purchase 2.5% of ivi’s shares at a predetermined price.
So far, the video platform relied heavily on venture financing. Less than a year ago, a group of top Russian and foreign investors injected $40 million into ivi.ru. Earlier rounds included:
- An initial $30 million capital injection from from ru-Net (the previous name for RTP Global), Tiger Global Management and Frontier Ventures in 2010;
- A second round of funding, in 2012, which provided $40 million from the same investors and Baring Vostok, the famous US-led private equity firm;
- A $3.5 million round secured in 2015 from Buran Venture Capital.
The company is now considering public, as reported a few months ago.
Hot video market
In 2019, the Russian online video market reached to 17.1 billion rubles ($265 million at the average exchange rate of that year), up 50% from the previous year, according to TMT Consulting.
This market did not exceed 1 billion rubles in 2013 and $30 million in 2011 (see EWDN’s industry report).
At the beginning, the business model of Russian online video platforms relied primarily on advertising revenues. However, in 2017, user-generated revenues exceeded advertising revenue. Since then, the share of user-generated revenues has grown constantly, wrote Vedomosti.
In the first half of 2019, this share reached 70% of total revenues.
