The European Bank of Reconstruction and Development (EBRD) has provided finances to a Russian company for the first time in more than five years under its emergency coronavirus support fund.
The EBRD stopped making active investments in the country in 2014, following Western sanctions stemming from the events in Ukraine and Crimea. The group has also wound down its presence in Russia, though maintains an office in Moscow to work with its existing Russian portfolio companies, which the EBRD maintained despite the block on new investments.
Travelata, an online reseller of package tours, was among the latest cases of EBRD investment in Russia, with a $7 million capital injection agreed in July 2014.
The bank has just announced it will further provide finance to this startup as part of its 1 billion euro coronavirus funding program designed to support portfolio companies.
Travelata is one of those companies that would thrive had not the pandemic shaken entire industries across the world.
“Until COVID-19, Travelata reported consistently triple-digit year-on-year growth, being a profitable market leader,” said Dutch businessman Bas Godska, an early investor in the company, in an exchange with East-West Digital News.
“A household brand in the online tour packages niche, this company served well over a quarter of a million clients during nearly a decade,” he added.
Godska recently launched a venture fund, Acrobator Ventures, which plans to “invest in one Russian and one Ukrainian startup this month,” he revealed.
Meanwhile, new investments in Russia should not be expected from the EBRD. A representative told The Moscow Times that the rescue funding of Travelata does not represent a new equity investment in the firm and does not signal a change in the EBRD’s strategy towards Russia.
Other Russian companies are eligible under the EBRD’s “solidarity package,” however. This program covers EBRD companies in 38 emerging economies.
“The EBRD remains present in Russia to support existing projects and our clients. The bank’s operational approach, following guidance from a majority of directors, is currently not to undertake any new business in the country,” a statement on the group’s website said.
- This story is part of EWDN’s special series: “Russian tech amid the pandemic: Impact and response.”
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