Naspers-Owned OLX Buys 29% Stake in Russia’s Avito

South African classifieds business OLX Group has announced an investment of $1.16 billion to acquire a further 29.1 percent stake in Avito, the leading online general classifieds and property platform in Russia, TechCrunch reports.

The move, announced last week, raises OLX’s stake increases from 70.4 percent to 99.6 percent on a fully diluted basis. The remaining shares are held by existing management.

Naspers initially invested in Avito in 2013. Over the last five years, Avito has established leading positions in five key categories, namely goods, autos, real estate, jobs and services.

With 10.3 million daily unique visitors, Avito now attracts a large portion of the Russian internet population every day.

“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.”

In the last six months ending September 30, Avito generated sales of 10.3 billion 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 that sold up in this deal.

In the first quarter of the 2019 financial year, Avito revenue increased by 31 percent to $162 million, driven by enhanced product features, strong vertical traction and working closely with professional advertisers. The business continues to generate robust profit margins.

The transaction closed on January 25 and was funded by Naspers’ existing cash resources.