VK Company, a Kremlin-controlled Russian Internet giant, is seeking to acquire the leading local classifieds platform Avito, which is owned by Naspers affiliate Prosus.
Prosus could also sell its 25.7% stake in VK Company, reported the Russian media citing Bloomberg.
Russian oligarch Vladimir Potanin is also regarded as a potential acquirer of Avito, according to the news agency.
After making Avito a fully autonomous entity in March, Prosus announced its intention to leave Russia and sell Avito in May.
Bloomberg heard that analysts now estimate the platform’s value between 67 to 100 billion rubles (around $1-1.5 billion at the current rate).
Valuation in free fall
The company was valued at $2.7 billion in 2015, when Naspers acquired a controlling stake in the company, and at $3.85 billion in 2019, when the South African group completed the acquisition.
According to Raiffeisenbank analyst Sergey Libin, Avito’s value even reached some 500-600 billion rubles just before Russia invaded Ukraine in February 2022 ($6.25-$7 billion at the pre-war exchange rate).
After the war destroyed a part of it, Avito’s value could be further affected by a bill under discussion at the State Duma. Targeting Avito explicitly, the supporters of this law want to prohibit foreigners from owning more than 20% in Russian online ad services.
Launched in 2007 by Swedish entrepreneurs Filip Engelbert and Jonas Nordlander, Avito quickly asserted its leadership in Russia. The company was backed by a bevy of international investors, including Vostok Nafta Investment (now rebranded to Vostok New Ventures) and Kinnevik.
In November 2021, according to Similarweb, Avito became the world’s most visited classified ads website with some 280 million visits monthly. Company revenues reached $313 million in 2020, according to data cited by ReviewBolt.
