MOSCOW, March 12 (RIA Novosti) – South Africa-based multinational media group Naspers has agreed to merge its two Russian Internet classified sites with their bigger rival Avito, the latter said Tuesday, creating a company with a worth estimated by the Financial Times at more than $570 million.
The deal, which marks a milestone consolidation in Russia’s Internet sector, will merge Naspers’s Slando.ru and OLX.ru classified sites into the Avito brand to create what the owners say would be the world’s third biggest classified website after the US-based Craigslist.org and China’s 58.com., the FT reported.
The merged group is expected to become the fifth most popular Russian website, with more than 100 million page views a day, the newspaper said.
As part of the deal, Naspers will invest $50 million cash into Avito, according to Avito's press service. This would give Naspers an 18.6 percent stake in the new group, the paper said, adding that the website’s other investors are Swedish investment funds Kinnevik Investments and Vostok Nafta, and also Northzone Ventures, an early investor in Spotify, the online music streaming site.
Following the deal, Avito is expected to hold 25 percent of the Russian classified market by traffic and 15 percent by revenue, according to the FT.
Avito was launched in 2007, just before the global financial crisis of 2008-2009, and quickly gained customers: “People started to realize their wardrobes are full of rubles and not just old clothes,” the FT quoted Avito’s co-founder Filip Engelbert as saying.
Avito currently has 140,000 users a day listing items to sell on the site; one in five used cars in Russia is now sold on the website, and it has also become a popular venue for pet sales, with 1.8 cats and 1.9 dogs listed every minute, according to the FT.
Avito website generated $30 million in sales last year, the paper said.
Updated, correcting attribution throughout.