Zubr Capital
06 april 2017

On March 31 Zubr Capital investment company invested in 21vek.by

On March 31 Zubr Capital investment company invested in 21vek.by, a leader of e-commerce in Belarus. The company has been included into Zubr Capital Fund I portfolio which became the second deal of the Fund announced last year.

21vek.by is the largest e-commerce player in Belarus. Its market share is 14% with USD 50 Mio of sales in 2016. The compound annual growth rate (CAGR) of sales over the five-year period amounted to 19%.

It is known that Zubr Capital have acquired a blocking but not the majority stake. The trade amount is about USD 3-7 Mio, which is standard for the fund.

The interest of Zubr Capital Fund I in an e-commerce-related transaction can be explained by the fact that e-commerce is a most promising economy sector. The average annual growth of e-commerce is 5-15%. This is a high figure and a strong argument for investing in this area. Last year market value of Amazon became 1.5 times larger than that of all the major traditional retailers put together (from Wal-Mart to Best Buy).

At the same time this area is less developed in Belarus than even in the neighboring countries. Zubr Capital’s team perceives this lagging as an opportunity for a rapid development of a new portfolio company.

According to Oleg Khusaenov, the CEO of Zubr Capital, “In our view investing in 21vek.by is investing in the future which is already knocking on our door. However, looking at the development of e-commerce in Belarus we see a broad perspective of growth. We are noticeably lagging behind not only the Western countries but also our neighbors in the level of development of e-commerce. For example, in Belarus e-commerce accounts for 0.6% of GDB, whereas in Russia and the Ukraine its share is 1.4% and 2.5% respectively. But for us as an investment company this lag is an opportunity in the first place. And in this deal our priority as a fund is to create the strongest leader of the area which could show a general growth of the whole sphere on the level of the neighboring countries.”

At the closing of the deal Sergei Vainilovich, a co-founder and the business manager of 21vek.by remarked, “Attracting such a major fund as Zubr Capital will boost development of the company. From the financial point of view the investment will allow us to speed up our growth in Belarusian market and to consider expanding to cross its borders. At the same time we set a high value on competencies and expertise which our partners from Zubr Capital can share with us. This will allow us to strengthen the business in terms of quality and to move to a new level of development, to join the ranks of the largest and most successful players of Belarusian business”.

It is to be recalled that at the end of 2016 Zubr Capital launched Zubr Capital Fund I, a new fund of about USD 50 Mio with a focus on growth companies with export potential showing rapid recovery of financial performance after the devaluation. 21vek.by became the second company of Zubr Capital Fund I (the first deal with Soft Club, a banking software developer, was concluded in 2015).