Naspers Invests $1.2B In Russian Online Classifieds Platform Avito

Naspers Invests $1.2B In Russian Online Classifieds Platform Avito

South Africa-based Internet and media company Naspers today announced a $1.2 billion investment to become the largest shareholder in Avito, a leading online classifieds platform in Russia, according to a press release.

Naspers is buying shares from existing shareholders to increase its stake in Avito from 17.4 percent to 67.9 percent.

Russians use Avito.ru to buy and sell goods such as home electronics, clothing, cars and real estate, according to Naspers. In addition, thousands of Russian businesses use it to sells products and services.

Avito also operates classifieds sites in the Ukraine, Egypt and Morocco.

Naspers initially invested in Avito, Russia’s largest generalist classifieds platform, in 2013, acquiring an 18.6 percent stake after merging its Slando.ru and OLX.ru platforms into one entity. In 2015 Naspers increased this stake to 22 percent.

Since 2013 the company expanded to become a classified site for general goods, auto, jobs and services, and real estate, including Domofond, a separate real estate site in Russia, according to AimGroup.

With around 35 million unique monthly visitors and 8.6 billion monthly page views, Avito is one of the top 10 websites by traffic in Russia, according to Naspers. The company reported revenues of $76.5 million for fiscal year 2014 — a 76 percent increase over the previous year.

Naspers said the transaction strengthens its position as a global leader in online classifieds and is a continued commitment to a very attractive business.

“As an early investor, we are excited about the long-term prospects of Avito,” said Bob van Dijk, Naspers CEO, in a prepared statement. “The Russian e-commerce market is expected to grow significantly with more people gaining online access. Over time, ecommerce ratios should move in line with other large countries.”

“This transaction will increase our exposure to the large-scale and attractive Russian online market, to the clear market leader in online classifieds and to a talented management team,” said Martin Scheepbouwer, CEO of Naspers classifieds.

More than 50 percent of Avito’s traffic is now coming from mobile devices, compared to 32 percent at the beginning of 2014.

Filip Engelbert, CEO and co-founder of Avito, said Avito’s management will remain invested. “Naspers is well known for trusting and supporting the management teams of the companies they invest in,” he said. “We believe this deal is mutually beneficial, and, from our perspective, we welcome Naspers’ very long-term view on Russia.”

The transaction is subject to approval by anti-trust authorities and by the South African Reserve Bank, Naspers reported. While the acquisition may initially be funded from Naspers’s existing cash resources and debt facilities, the group is evaluating long-term funding alternatives. This transaction will not increase its existing debt profile in the medium term, Naspers said.