The landscape of Russian Internet:most promising niches 1
Who we areFast Lane Ventures capitalizes on the significant opportunities within the Russian internet sector – one of the most growing sector of economy • Fast Lane Ventures is a leading developer of internet companies in the high growth Russia internet market. Our strategic focus is internationally successful ideas in consumer Internet • Unlike traditional venture funds we act as both an operational partner and investor at the same Who we are time: we invest at seed-stage and provide our portfolio companies full operational support, management and promotion after their launch • We believe in Russian great future and head a new wave of Russian consumer internet. • 5 market sectors covered: e-commerce, consumer service, b2b service, content & advertising, social services • 15 companies established Achievements • 1 company sold • 55 million USD of investments attracted in Fas Lane Ventures and its portfolio companies • 700 employees are building start-ups with Fast Lane Ventures 2 2
How we get new ideasIn 2011 we launched 12 companies, after considering 580 business models, anddiscussing 146 projects in detail on weekly IC There four major sources of incoming ideas: We issued ‘GO’ on 12 Management, shareholders and Submitted Internal Analysis of investors companies… partners projects analysis portfolios Heverest DomGeo TravelRent 130 345 45 60 VitaPortal OdinOtvet RentHome 587 Preliminary analysis Juvalia Kommerstate Lokata PinMe Eventmag HomeFair Step 1 146 Step 2 50 Our Investment Criteria:•• ‘Go’ idea has to be based on proven business model Project has clear and fast road to market Step 3• Fast Lane Ventures can effectively contribute in day-to-day operations 22• Project meets seed (EUR 0,3M-0,7M) and cumulative funding (up to EUR 3M-20M) requirements• Currently market niche has low level of competition and project is positioned to capture leadership• Business model is ‘marketing driven’ and allows scalability GO• There clear exit opportunities 3
Our projects Ecommerce projects: •Sapato – Shoes store (sold to Ozon Feb,2012) •Heverest – Sport and outdoor store •HomeFair – Home goods and furniture (will launched April, 30) 4
What projects will be funded in 2012Investors will invest in project that will solve the real customers or enterprises problems Skype –free calls around the World, Dropbox - cloud storage and collaboration, Facebook - connect and share, Linkedin - know what you friends are doing and expose yourself for headhunting, Groupon – get goods and services with great discounts. 6
Some obvious trends 2011 • Regional DevelopmentEcommerce • Categories: Home goods, furniture, • Infrastructure and payment providing for ecommerce • Targeting and retargeting (not only Google, Criteo, Sociomantica)Advertising • Step from last-click analytics to multichannel marketing • Mobile ad • Collaborative news creation • New format in news (animation, infografics, maps, panoramas) • Content on demand Media • Multichannel news broadcasting 7
Russian E-commerce:Double digit growthSpending on the internet is growing fast, but it’s still relatively low compared to other nations 25 E-commerce turnover, Russia, $ bn Russia e-commerce market: 20 20 • 5-6k internet shops • Most developed are discreet goods and clothes 36%p.a. 15 • Over 7m people shop online every month 30%p.a. • Another 10m shop irregularly 11,2 40% p.a. • Total internet audience 60m users, which is 10 8,2 significant buying power 6,3 • 2014 growth expectations: 4,5 5 • 3-4% of total retail turnover • $20bn market size 0 2008 2009 2010 2011 2014(E) Share of buyers in Cities vs regions depending on Internet E-commerce turnover as % of retail turnover, 2010 experience , 2011 UK DE US FR EU PL RU 1,6% 0% 2% 4% 6% 8% 10% 12% 8
Best niches for e-commerce Key factors: • High volume of categories • High online penetration • High AOV & margins • Doable logistics • Repeated buying rate • Low competition
Investment landscape in 2010-2011 2010 $1,3 bln, 59 deals Reported 59 deals $250m $1050 mln startups IPO & mature companies 2011 $2,15 bln Reported 213 deals $500m $1650 mln startups IPO&mature companies• Number of deals increases, however average deal size is smaller in 2011• Radical growth of investors’ interest in internet startups at the seed stage• Russian internet investment process evolves in the following manner: a good job at the start, slowdown and delay during the later rounds and deceleration at the exit point• Runet champions dominate the landscape, all startups combined weight only ¼ of deal volume• No massive market entry of Global leaders via copycat acquisition
Investment landscape in 2010-2011 Number of deals Deal volume by sector, 2010-2011 Sector Deal volume E-commerce 338 655 000 Video 173 425 000 Software 70 934 000 Games 42 050 000 Consumer web 22 151 000 SaaS 19 211 000 Social 15 722 000 Mobile 11 232 000 Search 9 000 000 Advertising 7 476 000 Communication 3 834 000 Dating 3 550 000 Business services 2 590 000 Cloud computing 2 334 000 Online Recruiting 1 550 000 Online Education 1 174 000 Average deal, $• Excluded: Yandex, Mail.ru, Vkontakte, Ozon, Odnoklassniki• Main targets are E-commerce, Video, Software, Games, SaaS• E-commerce includes E-retailing, Travel, Coupons, and other.
Major deals 2010-2011 Ozon is one of the first online retailers in Russia, established in 1998 by the Russian software house Ru-Net, Rakuten, Alpha Ozon (ozon.ru) 100 000 000 Sep-2011 Unattributed Reksoft. Its core assortment are books, electronics, music, and movies. Now it expanded to sale of E-commerce Associates, Index Ventures travel, shoes, and electoronics. Accel Partners, Mangrove Capital Partners, Direct Group, KupiVIP.ru is an online shopping club in Russia, operated by Privat Trade Ltd. The site organisesKupivip (kupivip.ru) 55 000 000 Apr-2011 Round C E-commerce Oliver Jung, ARLAN, Balderton designer brand online sales in fashion with discounts of up to 70% offline boutique prices Capital Kinnevik and Northzone Avito (avito.ru) 26 000 000 Nov-2010 Round B AVITO.ru is the leading classifieds service in Russia. E-commerce VenturesBiglion (biglion.ru) 25 000 000 Tiger Global Management Dec-2011 Round B Biglion is one of the leading Russian daily deal websites and biggest local competitor of Groupon. E-commerce KupiVIP.ru is an online shopping club in Russia, operated by Privat Trade Ltd. The site organisesKupivip (kupivip.ru) 20 000 000 Accel Partners Jan-2010 Round B E-commerce designer brand online sales in fashion with discounts of up to 70% offline boutique prices Almaz Capital, Baring Vostok, The leading internet company in Russia, operating the most popular search engine and the most visitedYandex (yandex.ru) 15 000 000 Sep-2010 Unattributed Search UFG website. One of the leading consumer electronics online retailers in Russia. Utinet is first online company to Utinet (utinet.ru) 13 000 000 Equity Capital Markets Jul-2011 IPO E-commerce complete listing on on MICEX. General Catalyst Partners, Ostrovok Accel Partners, Atomico, 12 600 000 May-2011 Round B E-commerce (ostrovok.ru) Founders Fund, Kite Ventures, foreign angel investors Ostrovok.ru provides Russian consumers with hotel booking services. Parallels is a worldwide leader in virtualization and automation software that optimizes computing for Parallels Russia Partners, Bessemer consumers, businesses, and service providers across all major hardware, operating system, and 12 000 000 Feb-2010 Round D Software (parallels.com) Venture Partners virtualization platforms. Founded in 1999, Parallels is a fast-growing company with 800 employees in North America, Europe, and Asia. Team Europe, Kite Ventures, Delivero 10 500 000 Point Nine Capital, Ru-Net, Sep-2011 Round A Delivero is a food delivering service. Delivero is part of international delivering food holding E-commerce (delivero.ru) Tengelmann DeliveroHero Anywayanyday 10 000 000 Tiger Global Management Jul-2010 Round A Anywayanyday is leading Russian online travel agency. E-commerce(anywayanyday.ru) Lamoda Tengelmann Group, Holtzbrinck 10 000 000 Apr-2011 Round A E-commerce (lamoda.ru) Ventures, Kinnevik Lamoda.ru is a Russia-based online shoe retailer launched by Rocket Internet. Playnatic Playnatic Entertainment is a company that develops, publishes, online games and web projects. 10 000 000 Parta Group Mar-2010 Round A Games (playnatic.com) Playnatic Entertainment was founded in December 2008 as subsidiary of IR "Parta Group" Fast Lane Ventures, DirectSapato (sapato.ru) 9 500 000 Group, eVenture Capital Aug-2011 Round D Sapato.ru is Russias leading online shoe retailing business catering to women, men and children. The E-commerce Partners, Intel Capital, Kinnevik company is listed in the top-20 largest e-shops in Russia. Intel Capital, Direct Group,Sapato (sapato.ru) 8 500 000 eVenture Capital Partners, Jun-2011 Round C Sapato.ru is Russias leading online shoe retailing business catering to women, men and children. The E-commerce Kinnevik company is listed in the top-20 largest e-shops in Russia. Fast Lane Ventures, DirectSapato (sapato.ru) 7 400 000 Group, eVenture Capital Nov-2010 Round B Sapato.ru is Russias leading online shoe retailing business catering to women, men and children. The E-commerce Partners, Kinnevik company is listed in the top-20 largest e-shops in Russia. Nival Network 1C Company, Digital Sky 7 000 000 Mar-2010 Unattributed Nival is developer and publisher of online games. Games (nival.com) Technologies, Sergey Orlovskiy
EXITS – mostly technologyacquisitions Qik Qik was founded in 2006 to enable mobile phone users to share live video with 150 000 000 Skype Jun-2011 Acquisition their friends, family and communities on the web and on their phones. (qik.com) Darberry 66 000 000 Groupon Aug-2010 Acquisition (groupon.ru) Darberry is Russian daily deals leader sold to Groupon Inc. SPB Software is a global company developing software for mobile devices and SPB Software smartphones running Windows Mobile, Symbian, iPhone, BlackBerry and 38 000 000 Yandex Nov-2011 Acquisition Android OS operating systems. SPB Software is known as a mobile industry (spb.com) market leader having produced some of the most popular software apps for the mobile environment worldwide. GIS Technologies 5 000 000 Yandex Jun-2010 Acquisition (maps.yandex.ru) Gis technologies is mapping data provider. Kanobu Kanobu Network is a gaming media company based in Russia. Provides 4 000 000 Rambler Jun-2011 Acquisition (kanobu.ru) different blogs, communities, news about games and gaming industry. Astrostar Astrostar develops services, content and software solutions in astrology and 3 500 000 Direct Group Sep-2010 Acquisition (astrostar.ru) related fields. Alawar Alawar Entertainment specializes in the global development, publication and 2 500 000 Almaz Capital Feb-2010 Unattributed distribution of casual games for multiple platforms. Company is headqatered in (alawar.ru) Novosibirsk. LogneX Solutions for online accounting. Service is based on Cloud computing. Provides 1 200 000 1C May-2011 Unattributed tools for internet-stores, sales company, etc. (moysklad.ru) Loginza Loginza develops plugin for identification, which provides unified access to 600 000 Yandex Jan-2011 Acquisition (loginza.ru) popular web services. WebVisor 500 000 Yandex Dec-2010 Acquisition WebVizor records users activity on the site and enables you to watch it in stream.• Darberry and Qik are Russian success stories of 2010-2011• Nearly half of exits are technology, product or team acquisitions• No massive market entry of Global leaders via copycat acquisition• Not including companies that facilitated exit via mail.ru IPO (Astrum, HH, etc)
Tatiana Tsvetkovattsvetkova@fastlaneventures.ruhttp://fastlaneventures.ru/en/+7 (916) 645086812 Dvintsev Str. bld. 1, Moscow, Russia 127018
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