South African internet conglomerate Naspers is best known for backing Chinese tech giant Tencent, but it also operates a vast network on of online classifieds businesses. That network just got a little larger after Naspers took full control of Russia-based Avito through a new $1.16 billion all-cash investment to top up its ownership to over 99 percent.
Avito is Russia’s top classifieds site, claiming 10.3 million unique daily visitors. It currently has close to 47 million listings covering categories that include goods, auto, real estate, jobs and services.
The deal, which was made via Naspers’ OLX Group, takes its ownership to 99.6 percent on a fully diluted basis and values the full company at $3.85 billion.
While classifieds may sound like a very retro corner of e-commerce, it remains a growing business (just ask Facebook, which has been growing its own marketplace and giving it increasing exposure across its own network).
Particularly in emerging and developing markets, leading local players continue to find traction. In the last six months ending September 30, Avito generated sales of 10.3 million rubles ($157.50 million), up 30 percent on the year before; and it operates with a 65.4 percent ebitda margin, with listings growing 7.4 percent to 17.46 million — according to Vostok New Ventures, one of the backers who sold up in this deal.
“Avito’s talented management team, led by CEO Vladimir Pravdivy, has demonstrated the capacity to achieve remarkable growth consistently over time,” said Martin Scheepbouwer, CEO of the OLX Group, in a statement. “Business performance is excellent and we look forward to continuing this trend by further leveraging the technology, knowledge and experience from Avito within OLX Group and vice versa.”
Naspers-OLX originally took a majority stake in 2015 through a $1.2 billion investment. Before that, it had been involved in Avito as early as 2013, when the company was formed by a merger between Slando.ru and OLX.ru, two rivals that were both backed by Naspers.
Consolidating its position in companies where it’s already strong helps Naspers also use the cash from those operations to invest in newer areas of business like tapping into more on-demand services and innovations in financial services to complement the legacy areas.
“Avito is the leading online classifieds player in Russia and our decision to increase our stake reflects our belief in the long-term prospects of this great business and the Russian internet market,” said Bob van Dijk, Naspers CEO, in a statement. “This investment further strengthens our global position in online classifieds, a core focus for Naspers alongside online food delivery and fintech.”