- Vostok New Ventures values company at about $2 billion
- Avito to buy control in Russian delivery service CheckOut
Avito, the Russian online classified-ad site that’s thriving in spite of the country’s recession, is prepared for an initial public offering, according to Chief Executive Officer and co-founder Jonas Nordlander.
The Web-based platform that allows customers to buy everything from TVs to sofas and cars has adapted internal controls and procedures to meet listing requirements for larger markets, including the U.S., and has met with investors to raise the company’s profile, Nordlander said in an interview. Investor Vostok New Ventures valued Avito at about $2 billion at the end of June.
Avito is "in the preparation for the simple reason that we want to have options if it at some point makes sense for the business and shareholders to go public," he said, adding that Avito isn’t in a hurry to sell shares and hasn’t hired any advisers.
With about 26 million visitors in July, Avito is among the country’s top-10 most popular websites, according to researcher TNS. South Africa’s Naspers Ltd. merged its smaller Russian classifieds sites into Avito in 2013 in return for a stake in the company. Other shareholders include Investment AB Kinnevik and Baring Vostok.
German online classifieds business Scout24 Holding GmbH said it raised 228 million euros ($223 million) in a Frankfurt IPO on Thursday. The stock rose as much as 2.5 percent above its offer price of 30 euros.
Avito said on Thursday it agreed to acquire control of Russian online-delivery platform CheckOut, a service that lets shoppers choose the quickest and cheapest way to ship goods across Russia. About 15,000 Russian online stores use Avito to sell and promote their goods, while orders can fall apart because of logistics problems in the vast country.
“Millions of people use Avito every day to sell and buy hundreds of thousands of different goods,” Chief Operating Officer Christoffer Norman said in a statement. “Now these deals are mainly struck within a particular city, while we would like both companies and consumers to make gainful deals countrywide.”
Avito is thriving despite a squeeze on consumer spending caused by plunging oil prices and the ruble’s devaluation as shoppers turn to find better deals online. Millions of Russians are sinking into poverty as the collapse in crude prices drags down the economy of the world’s biggest energy exporter, sends the ruble into a tailspin and crimps budget revenue.
Avito boosted second-quarter revenue 47 percent to 1.57 billion rubles ($24 million) and had an adjusted margin of earnings before interest, taxes, depreciation and amortization of 50.5 percent, according to Vostok New Ventures.