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Russian Amazon raises $100m in funding

Russia’s biggest online retailer raises 0m from venture capital coalition

Russia’s answer to Amazon,, has raised 0m (£62.5m) in what it says is the largest ever funding round by a Russian internet firm.

The online retailer raised the fund from a coalition of venture capital firms, including Skype investor Index Ventures and Rakuten, the Japanese internet shopping giant. is Russia’s largest online retailer, shipping everything from CDs to books and clothing. The Moscow-based firm had 5.2 million registered users last year, and revenues jumped 34% year on year to 7m, according to the company.

Maelle Gavet, chief executive of, said: “We are [the] leader in our field, and as internet penetration rates gather pace we can expect to see our business expand further.”

Like Amazon, Ozon has expanded sales of physical CDs and books to ebooks and downloads. Gavet told the Guardian that Ozon is leading the drive to get people to pay in Russia, a country that has a “piracy endemic”.

Piracy of video games and music has long been considered a serious problem for Russia’s internet economy. Group, Russia’s largest internet firm, warned in May that illicit downloading could hold back the country’s online ambitions, following its bn Wall Street flotation.

Gavet said: “The only way to fight against Russia’s endemic piracy is through wider choice and [by making music downloads] more easily available.”

With more than 60 million internet users, Russia is Europe’s second largest online market, behind Germany. However, the proportion of Russian households with web access remains lower than other large internet markets, at just 43%.

According to a November 2010 study by Google Russia and Citibank, Russians were expected to spend 600bn roubles (£12.7bn) online using credit cards – which relatively few Russians own – last year. That figure is expected to rise to 600bn roubles in 2012.

Despite a string of Wall Street flotations this year from internet firms based in Russia and China, Gavet insists her firm is in no rush to go public.

“[After this 0m funding round] we won’t need new money at least for another two months,” she joked. “I’d be lying to say that an IPO was not on my mind, but at the minute we’re focused on making the business work.”

The Russian search engine Yandex made its Wall Street debut in May in a flotation that valued the company at bn. Yandex shares have fallen 23% since the IPO, but the company’s market capitalisation this week stood at .6bn.

Gavet said she didn’t understand the logic of the valuations attached to many newly-public internet firms. She declined to say whether Ozon made a profit in its past financial year.

The 0m funding round was led by existing Ozon investor ru-Net, along with Rakuten, Swiss venture capital firm Alpha Associates and Index Ventures. Baring Vostok Private Equity Fund remains the largest shareholder in ,but did not participate in the funding round.

Russian venture capital companies have taken stakes in a number of western companies. Moscow-based Mail,ru, formerly known as Digital Sky Technologies, is one of the biggest investors by value in Facebook, having put more than 0m into it. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds