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Today news broke that Slando, the classified ad website which has 11 million users in eastern Europe (with 81% of them located in Russia and Ukraine), was sold. The buyer is Naspers, a South African Holding, which also owns classified websites in eastern Europe.
The deal is covered in mistery. My contact, who is no longer working in Slando, but has close links with its management, said that everyone is under strict non-disclosure agreements and can not comment much about the transaction, but here is what we know.
The company has been set up by Britons Simon Crookall and Michael Pennington in 2005 after they have successfully exited their other venture Gumtree, property advertisement website focusing on people moving to the UK from abroad.
Slando has been established from the outset as a free classified website focusing on the eastern European markets. A few years ago I have helped the team find software development resources (in eastern Europe, of course). According to “Otkritie Capital” Alexander Vengranovich, based on the website traffic the value of the company might be as high as $50 million.
And here is why I think it’s a good news. First of all, investors are always thinking about the exit. They do not invest in the companies because they are crazy about ideas or because they love the lifestyle the business brings. It’s about money and a return. As far as a return is concerned, it is only possible if the investee company, or a stake in it is sold. Yandex and Mail.ru went to public markets. Some are still getting ready to do so (Parallels, maybe Alawar Entertainment).
Very few are sold to the strategic buyers. According to Elena Masolova, the founder of Russian Groupon clone Darberry, which she sold to Groupon a year ago, she plans to build clones. Amongst other things, there is a higher chance to sell such company as exit opportunities on the local Russian market are limited. She is now working on Zynga clone Pixonic.
Another point, I am trying to make is think local. While many eastern European entrepreneurs are setting their sail off to Silicon Valley, as soon as they get funded, the British duo Crookall and Pennington looked East, and proved that one can create and sell a successful internet business with an ad-based business model here, in eastern Europe.
Also, such exits will further impact the tech entrepreneurship in the region. Last year, Naspers’ Allegro has acquired a majority equity stake in a Romanian company GECAD ePayment, the country’s leading ecommerce solutions provider. Guess what the founder of GECAD Radu Georgescu is doing now? He invest in the Romanian tech startups through his investment vehicle, also called GEHAD.
Let Naspers spend more money in the region, so that the whole tech entrepreneurships get fuelled by new exits, and new VCs.
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vita at goaleurope dot com