Prosus, the Amsterdam-based technology giant, recently invested $1.5 billion in Russia’s largest online classifieds platform, Avito. This investment has increased the valuation of Avito to $6.2 billion, making it one of Russia’s most valuable tech companies. This article will explore the reasons behind Prosus’ investment in Avito and the implications of this deal.
Prosus’ Investment in Avito
Prosus is one of the largest technology investors globally, with a portfolio of companies worth over $200 billion. The company has invested in some of the biggest tech companies globally, including Tencent, Delivery Hero, and Mail.ru. Prosus’ latest investment in Avito is significant, marking the company’s entry into the Russian market.
Avito is a leading online classifieds platform in Russia, with over 10 million monthly active users. The platform lets people buy and sell goods and services across various categories, including real estate, cars, and jobs. Avito’s revenue in 2020 was $609 million, up 28% year-on-year, with a net profit of $153 million. Prosus Russia Avito 6BPrinslooBloomberg
Prosus’ investment in Avito will give the company a 20% stake in the platform, making it one of the largest shareholders. The deal is expected to close in Q4 2021, subject to regulatory approvals.
Reasons Behind Prosus’ Investment
There are several reasons why Prosus decided to invest in Avito. Firstly, Avito is a market leader in Russia’s online classifieds market, with a solid user base and revenue growth. Russia is the largest internet market in Europe, with over 100 million internet users. The country’s e-commerce market is expected to grow by 19% annually over the next five years, making it an attractive market for tech investors.
Secondly, Prosus has a track record of investing in online classifieds platforms globally. The company’s investment in Avito aligns with its worldwide strategy in leading online marketplaces. Prosus’ portfolio includes OLX Group, let go, and Movile.
Thirdly, Prosus has identified Russia as a critical growth market for its business. The company sees Russia as an important market for food delivery and classifieds businesses. Prosus has also recently acquired a stake in Delivery Hero’s Russian business, Yandex Eats.
Implications of the Deal
The investment by Prosus in Avito has several implications for the Russian tech industry. Firstly, it signals confidence in the growth potential of Russia’s tech industry. The fact that Prosus, one of the world’s largest tech investors, has decided to invest in Avito shows that there is potential for Russian tech companies to compete globally.
Secondly, the deal could encourage other global investors to invest in Russia’s tech industry. Prosus’ investment in Avito is one of Russia’s most significant tech investments to date. The deal could attract other investors to the market, who may see the potential for high returns on their investments.
Thirdly, the investment could further consolidate Russia’s tech industry. Avito is the market leader in Russia’s online classifieds market, with a significant market share. Prosus’ investment in Avito could enable the platform to expand its operations and acquire smaller competitors. This could lead to further consolidation in the market and make it harder for new entrants to compete.
Finally, the deal could have positive implications for Avito’s users. The investment by Prosus could enable Avito to expand its operations and improve its services. This could lead to better user experiences and more opportunities for sellers to reach a larger audience.