The South African holding Naspers acquired an additional 29.1% of the shares of the service Avito.ru through the NC Europe Holdings Fund (Naspers Russia), increasing the company’s share from 70.4% to 99.6%.
“Through its company OLX Group Naspers invests $1.16 billion in Avito, acquiring an additional 29.1% of shares, and thus brings its share in the company to 99.6%,” the holding said in a statement.
Another 0.4% of the shares in Avito are owned by the company’s management. The transaction was financed from available funds to Naspers.
The sellers of 29.1% of shares is not specified in the message of Naspers. At the same time, the Swedish Fund Vostok New Ventures previously announced the sale of its shares in the amount of $540 million.
Prior to the deal (on January 25, 2019) Swedish Fund Vostok New Ventures owned 13.2% of Avito, the “daughter” of Baring Vostok – Geliria Holdings – 4.2%, the founders and management had 10% and 2.1% respectively. Reuters citing its sources reported that Naspers plans to buy shares from all shareholders and increase the share in the company to 100%.
“Avito is a leading player in the online classifieds market in Russia, and our decision to increase [the company’s] share reflects our confidence in the long-term prospects of this business and the Russian Internet market. These investments further strengthen our global position in the online classifieds market,” said Bob van Dyck, CEO of Naspers.
Avito was valued at $4 billion, as per Vostok New Ventures statement. Naspers itself in its report gives a slightly lower estimate- $ 3.85 billion – for comparison: the capitalization of “Yandex” on Friday, January 25, 2019, at NASDAQ was $ 10.7 billion. Mail.ru Group on the London stock exchange- $ 5.3 billion.
South African holding company first invested in Avito in 2013. In 2015, when Naspers increased its stake in the company from 17.4 to 67.9%, they paid for these shares of $1.2 billion based on the valuation of Avito at $2.7 billion, which included debt that was 35 times larger than its revenue for 2014 ($76.5 million). Then Avito was rated only 1.6 times cheaper than Yandex. It turns out that the valuation of Avito’s business has grown almost one and a half times in three years.
Then Naspers has agreed to purchase the share of 31.7% from the Swedish Fund Kinnevik. Northzone Ventures and Accel; Baring Vostok cashed out ompletely from of Avito’s and the founders of the service Philip Engelbert and Jonas Nordlander reduced shares.
Avito is the largest and most popular Russian online classfieds service. Avito.ru established in November 2007 to sell or buy any goods – from clothing and furniture to cars and real estate.
In the ranking of the largest resources of Russian Internet on desktops and mobile devices the Avito site takes 12th place with a daily audience of 4 million Russians aged 12-64 years living in cities with a population of 100+ thousand people.
First place is taken by “Yandex” with 22 million Russians, and the second place by Mail.ru Group’s social network “Vkontakte” with 20.5 million, the third — Google with 18.1 million.
Goldman Sachs analysts call Avito the fastest growing ad placement service in the world. The company’s revenue in the first half of the 2018 financial year (April 1 – September 30, 2018) amounted to 10.3 billion rubles ($162 million) (an increase of 30.2%), compared to the same period in 2017, the company previously reported.
Adjusted EBITDA – 6.76 billion rubles (an increase of 41.3%), adjusted EBITDA margin was 65.4% or $103 million against 60.3% a year earlier.
The company … founded in 2007 by Swedish entrepreneurs Jonas Nordlander and Filip Engelbert. Main source of Avito income – charging for the promotion of ads.
The Avito service was originally part of the company that published the Yellow pages telephone directory in Russia. At least the first five years of the project was unprofitable. But already in 2011, the owners of Avito said that they expect soon to estimate the service at $1 billion that year, with revenue of $6.7 million, it was estimated at $66 million.
The owners of Avito made a bet on the active promotion of the brand on TV. Largely due to the massive campaign in 2010, the service surpassed its main competitor — the site-in terms of audience size irr.ru, the online version of “hand to hand” newspaper.
In the summer of 2014, Avito held a road show among American banks and investors, manager of an investment bank said earlier, but did not hold an IPO: investors appreciated political risks too much.
The monthly number of Avito visitors has increased from 25 million to 34.3 million people since 2015, active ads – from 32 million to 50 million, according to the company’s own data.
South African media holding Naspers was founded in 1915, the company has shares in Mail.ru Group, Chinese Tencent and Indian MakeMyTrip Limited. The company is listed on the Johannesburg and London stock exchanges.
Naspers is a co-owner of Mail.ru Group – South African company owns 27.6% of shares and 12.4% of votes. In the spring of 2015, the group launched its mobile classifieds service “Yula”. In 2017 it has acquired and integrated car sales service Am.ru.
“Yula” is actively developing, in particular, in the third quarter of 2018, the number of ads on the service had reached 25.8 million. Financial performance of “Yula” were not disclosed.
Vostok New Ventures called Avito the undisputed leader in the Russian market of online classifieds. The Swedish investment company, referring to the results of its own research, reported that 63% of users when placing ads for services choose Avito and only 4% choose “Yula”.