Posted on Tuesday, Oct 18th 2016
According to market reports, the global classifieds market is estimated to grow to $47 billion by the year 2020. Russian player Avito is a Billion Dollar Unicorn club member in the industry.
Avito was founded in 2007 by Swedish businessmen Filip Engelbert and Jonas Nordlander. The idea of setting up a classifieds site came to Jonas back in 1998. He had moved to Russia and he realized that the region offered great market potential for a business like that. It was when he met with Filip that the two decided to implement the idea and set up the website. Initially Avito was a trading platform called RuNet. Today, Avito operates as a classifieds website that offers users the capability to list an ad to find a product or service. It focuses on five key verticals – General Goods, Auto, Real Estate, Jobs, and Services.
In March 2013, Avito merged with its competitors Slando.ru and OLX.ru to become the fifth most popular Russian website and one of the leading classifieds websites in the world. Today, it remains among the largest websites in Russia. It has successfully adapted to the mobile technology as well, allowing users access to the trading platform from any location. The site claims to have more than 30 million online ads selling anything from TVs to sofas and is accessed by over 35 million users per month.
Avito also allows traders to sell their goods through the website. In July 2015 it had over 15,000 Russian online stores that were using its platform to sell and advertise for their goods. Last year, Avito had acquired delivery service aggregator CheckOut for an undisclosed sum. CheckOut allows online buyers to choose the quickest and cheapest way to ship goods across the country. Through the acquisition, Avito is helping improve delivery conditions for its business customers.
More recent statistics and detailed financials for Avito are not known. Back in 2013, the company held nearly 25% share of the Russian classified market in terms of traffic and 15% share in terms of revenue. Overall the company is estimated to have generated $30 million in sales in 2012. In 2015, Avito was trending at quarterly revenues of 1.57 billion rubles (~$24 million) and an adjusted EBITDA margin of 50.5%. In 2014, Avito had reported revenues of $76.5 million and an EBITDA margin of 50.6%.
Till October 2015, Avito had raised $142 million in venture funding from investors including Accel Partners, Baring Vostok Capital Partners, Kinnevik AB, Naspers, Northzone, and Vostok New Ventures. In October 2015, South African conglomerate Naspers announced plans to invest $1.2 billion in Avito to purchase a 67.9% stake in the company from existing investors. The deal valued Avito at $2.7 billion and was one of the largest European VC deal ever. Post the acquisition, while Naspar will have controlling stake, the founders will continue to remain involved with Avito. Analysts believe that Avito is now preparing to go public and is already adapting to the strict internal controls and procedures to meet listing requirements.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
Photo Credit: Nicolas Alejandro/Flickr.com
This segment is a part in the series : Billion Dollar Unicorns
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