Russia’s booming internet market has received another huge injection of growth funding. Ozon.ru, the largest Russian online retailer, has raised $100m in new venture-capital funding.
The investment in the self-styled “Russian Amazon” is the largest in the country’s e-commerce market after KupiVIP, a private buying club with big ambitions, raised $55m in April. Ozon’s round follows the stock-market debuts of Mail.ru and Yandex at eye-popping valuations.
The deals highlight the big opportunities that international and domestic investors are grabbing in Russia as internet penetration reaches more than a third of the country. Many expect Russia to overtake Germany as Europe’s largest internet market in the next two years.
The market is unusual because domestic firms are still winning out over international giants such as Google, Facebook, Ebay and Amazon, thanks to a combination of Russians’ national pride in their own companies and the unique challenges of online retailing in a vast country where payment and delivery systems are still significantly underdeveloped.
Ozon’s investors are a mix of strategic partners, local specialists and more traditional funds looking for Russian exposure. They include Rakuten, Japan’s largest online retailer which is expanding rapidly overseas, and Alpha Associates, a Swiss private equity firm.