Avito.ru, the biggest online classified ads site in Russia, has secured a fresh $75 million round of funding from Accel Partners’ London office. Founded in 2008, Avito has so far landed $101 million from Accel, Baring Vostok Private Equity, Kinnevik, and Northzone. The capital will be used for expansion and hiring.
Russia’s classifieds ads business has plenty of room for growth because – guess what, kids – it’s basically 1999 out there in Russia. And this large emerging market is playing through all those businesses models we know and love from back in the good ‘ol days. Expect more of this.
Avito is particularly interesting because, apart from being Russia’s only real classifieds site, it’s also a huge player across the significant categories of retail, real estate agencies and auto ads. It’s free to place an ad but optional extras like advanced search or highlighted ads are paid for.
It has 30 million unique users per month, while around six million items go up each month. Avito reckons by the end of this year the value of all items traded will pass 3 percent of Russia’s GDP. That’s the kind of growth Accel is buying into.
Accel’s Sonali de Rycker told me: “The real growth in Russia is because people are coming online in the regions now, not just Moscow. When people come online for the first time they first discover what they can buy – and that’s goods and services.” Thus, classifieds maps to that growth.
It’s my view that we will see many more fundings of sites and services like Avito in emerging markets over the next year. While the developed world debates whether there is a bubble in companies like Instagram, the real hyper-growth is playing out, out there in BRICs land.