Fifty-one percent of the net asset value (NAV) of Vostok New Ventures comes from Avito. But, the Swedish investment company is invested in several other classified companies. Of course, it is hoped one will turn into a “new Avito”.
Now, Vostok New Ventures might have struck it lucky. In its Q2 earnings report, the company this week said it – together with investment company Merro – might have found the “new Avito”. The site is Opensooq, and it is clearly on its way to becoming “the Avito of the MENA region”, the company said.
The company didn’t explain why it was so positive about Opensooq, which operates in 18 countries in North Africa and the Middle East. According to SimilarWeb.com, ten of these countries received about 90 percent of the 9.4 million visits (desktop and mobile sites) counted for Opensooq in July.
In its Q2 report, Vostok New Ventures lifts the veil over the following classified platforms: Merro, Propertyfinder, Wallapop, Hemnet, and Rozee and Mihnati of Naseeb Networks. Vostok New Ventures might have small stakes in these companies, but the information is valuable and difficult to find anywhere else.
Lately, Vostok New Ventures has taken a great interest in investment outside the classified sector. In Q2, the only investment made was in digital healthcare service provider Babylon for £17.3 million ($21.7 million U.S.). Other investments include a stake in car-sharing site BlaBlaCar and on-demand transport company Gett.
Not every investment is a success. Earlier this week, we reported on the insolvency of Carable (Garantibil) here. In this case, Vostok New Ventures pocketed a loss of $2.2 million. So, it could have been worse.
Here are some of the insights from the Q2 report on its classified companies.
Propertyfinder was valued 11 percent higher in Q2. But, Avito lost four percent when valued on June 30, due to a weaker ruble against the U.S. dollar.
On June 30, 2017, Vostok New Ventures valued Propertyfinder at $222 million U.S. for the entire company on the basis of the EV/sales peer multiples valuation model. Vostok New Ventures owns ten percent of Propertyfinder.
Propertyfinder performed well in FY2017:
• Total pageviews rose 49 percent y-on-y;
• Total sessions rose 50 percent y-on-y;
• Total leads generated climbed 45 percent y-on-y;
• Total unique users were up 48 percent y-on-y.
As Avito, Propertyfinder is a 10-year-old company and the clear market leader in both Qatar and UAE. It shows a profit on EBITDA level.
Vostok New Ventures also raised the valuation of its holding in Wallapop by as much as 60 percent, based on the transactions done in FY2016. Vostok New Ventures’s three percent in Wallapop was valued at $18.5 million. That means the entire Wallapop was valued at $616 million. Vostok New Ventures gave no information on the performance of Wallapop in 2017.
Instead, the report informed that Wallapop started charging for services in Spain late in 2016. Users pay to highlight their listings for 24 hours. The fee for highlighting varies slightly between products and regions, but it is around €2 in Wallapop’s main urban markets such as Barcelona, Madrid and London.
Vostok New Ventures owns 14.6 percent of Merro, the investment holding company that focuses on online marketplaces and was founded by Henrik Persson, Pierre Siri and Michael Lahyani in 2014.
Merro owns shares in several businesses. But, the big stakes are in Propertyfinder, Dubicars, and Opensooq – all operating in the MENA region. According to Vostok New Ventures, Propertyfinder has ”quickly become the leading real estate site in the UAE, Qatar, Bahrain, and Lebanon and is growing in popularity in the Kingdom of Saudi Arabia, Egypt and Morocco”.
Dubicars generates more than a million pageviews per week, and has more than 400 active car dealers from across the UAE. In the Merro family, there are also smaller holdings in classifieds. Here is what Vostok New Ventures wrote about them:
CloudSight (formerly Camfind) is a technology company that simplifies the creation of classifieds listings dramatically with its API (application programming interface).
• Yta.se (formerly Objektia), a company that simplifies the process of finding commercial real estate to lease or purchase. By relaying relevant information on a given property – and its surroundings – in a classic marketplace setting, Yta.se aims to become the Trulia of the commercial real estate industry.
• TipTapp, a mobile marketplace in Sweden which operates “reverse classifieds”, whereby consumers can post listings with products they will pay to get rid of, such as bulky trash, that would otherwise have to be transported to a recycling center or garbage dump.
• QuintoAndar is an end-to-end real estate rentals service in Brazil that connects landlords and tenants. There are significant pain points within rentals in the country due to bureaucratic legislation that effectively requires a co-signer to guarantee rent obligations. QuintoAndar removes this friction with a free insurance product to and by improving the general process of searching for properties, arranging viewings and signing contracts.
Vostok New Ventures holds seven percent of Swedish real estate site Hemnet. The investment is held indirectly through a company called Merro Partners SA (formerly YSaphis S.A.), where the Merro founders are the other owners.
Finally, the 23.7-percent holding in Naseeb Networks’ job site in Pakistan (Rozee) and Saudi Arabia (Mihnati) is described in the report. In total, 10,000 companies and five million job seekers use these services every month.
According to Vostok New Ventures, these sites have positive outlooks and their valuation has increased ten percent. That means, the total value of Naseeb Networks now stands on $19 million U.S..