PE-backed Russian e-commerce firm Ozon Group picks up $150 mln

Russia-based online store Ozon Group, which is backed by Baring Vostock Private Equity Fund, said Tuesday that it has secured $150 million in funding. The investors were Sistema and MTS. According to details of the transaction, Sistema and its telecom subsidiary MTS each bought a 10.8 percent stake in Ozon for $75 million. As a result of the investment, two representatives from Sistema and MTS will join Ozon’s board of directors. Morgan Stanley advised Ozon Group on the deal.

PRESS RELEASE

Moscow/London/New York – APRIL 29, 2014 – OZON Holdings Limited (“Ozon Group” or the “Company”), Russia’s leading e-commerce group, today announced that it has completed a $150 million funding round (the “Transaction”). The investors are “Sistema” JSFC (“Sistema”), the largest publicly-traded diversified holding company in Russia and CIS and Mobile TeleSystems OJSC (“MTS” or together with Sistema the “Investors”), the leading telecommunications provider in Russia and the CIS. The Transaction was structured as an issue of new shares to the Investors. Existing Ozon Group shareholders continue to strongly support the Company, including Baring Vostok Private Equity Fund which remains the largest single shareholder. At $150 million, Ozon Group is setting a new record of a single investment round in Russian e-commerce.
Under the agreement, Sistema has acquired a 10.8% stake for US$ 75 million in OZON Holdings Limited. MTS, Sistema’s telecom subsidiary, has also acquired a 10.8% stake at the same valuation. As a result two representatives from Sistema and MTS are expected to join OZON’s board of directors.
OZON Holdings is comprised of five companies, each adding significant value to the Russian e-commerce market, including OZON.ru, OZON.travel, O-Courier, Sapato.ru and OZON Solutions.
Proceeds from the transaction will be used to further develop all aspects of the Ozon Group business including significant expansion of delivery infrastructure across Russia, widening the already vast product assortment of OZON.ru and Sapato.ru, and continuing expansion of OZON.travel in OTA space.
According to Maelle Gavet, CEO of Ozon Group, “We are proud to welcome our newest investors, Sistema and MTS. Sistema has a unique understanding of the Russian market, a diverse portfolio of investment companies and a long-term approach to investment, which makes them an ideal partner for us. Our partnership with MTS will seamlessly merge MTS’s vast telecommunications experience with OZON’s thriving e-commerce platform. Together with our new partners we will seek to further develop our delivery system while keeping our eyes open to potential acquisitions and global partnerships to further enhance the business, ultimately better serving our customers.”
“Baring Vostok Private Equity Fund has invested in Ozon Group since 2000, and we have seen a steady growth of the company,” said Elena Ivashentseva, Senior Partner of Baring Vostok Capital Partners.
“OZON.ru is now the leading online hypermarket and the most recognizable brand in Russian e-commerce. The accession of new investors to the group of existing shareholders actively supporting the company will give a new impetus to the development of business and help OZON Group to realize its ambitious strategic plans. We look forward to working together with Sistema and MTS to bring the Company to the next level.”
Mikhail Shamolin, President and CEO of Sistema, commented, “Sistema’s investment in OZON provides the Group with an excellent entry into Russia’s rapidly growing e-commerce sector. Having captured over `16 million online users, OZON is a household brand with a loyal customer base, growing goods assortment and an excellent logistical platform. This investment, while financial in nature, also provides Sistema’s other businesses with numerous partnership and synergistic opportunities which will prove mutually beneficial for all.”
Mr. Andrei Dubovskov, President and CEO of MTS, commented, “Our investment in OZON complements our core mobile and retail businesses by aligning MTS with Russia’s leading e-commerce player. Upon completion of the transaction, we intend to establish a partnership with OZON to provide exclusive access to the company’s sales channels for MTS’s products and services. To further enhance our online presence, MTS will leverage OZON’s logistical infrastructure, its proprietary delivery services, IT capabilities and industry expertise to improve MTS’s own online store. Our partnership will also enable both companies to realize scale benefits in critical e-commerce categories, such as smartphones, tablets and consumer electronics devices. We see significant upside in leveraging our own resources and integrated marketing programs to bring greater value to our customers.”
Additional notes to editors
● OZON Holdings had a turnover of $750 million in 2013
● The total assortment available on OZON.ru exceeds 3 500 000 items and, on Sapato.ru exceeds 250 000 pairs of shoes, while OZON.travel allows bookings from more than 350 airlines and more than 278 000 hotels
● The combined number of registered users on OZON.ru, Sapato.ru and OZON.travel websites exceeds 16 million
● Morgan Stanley acted as an exclusive financial advisor to Ozon Group
About OZON
OZON Holdings is comprised of five businesses which cover the different aspects of e-commerce – OZON.ru, O-Courier, OZON travel, Sapato.ru and OZON Solutions. OZON is a privately-held company, whose main investors are Baring Vostok Private Equity Fund, “Sistema” JSFC, Mobile TeleSystems OJSC. Index Ventures and ru-Net Ltd, as well as Rakuten, Intel Capital, Holtzbrinck and Cisco.
OZON.ru – Founded in 1998, OZON.ru is the leading online store in Russia. With more than 750,000 unique visitors to the site daily, OZON.ru offers the largest assortment of goods with more than 3.5 million items listed. Sales are divided between the 14 different product categories: including books & media, software, games & music, mums & kids products, sports and beauty, home & deco, antiques, and many others.
O-Courier – O-Courier is OZON’s dedicated delivery service. The company is providing parcel delivery to end customers. Today, O-Courier operates a network of companies and agents across the Russian Federation and Kazakhstan, ensuring delivery across more than 2,200 delivery points. Apart of OZON Holdings subsidiaries, O-Courier offers its services to more than 70 smaller e-commerce players.
OZON.travel – OZON.travel, the leading Russian online travel agency, allows consumers to book hotel rooms and to purchase train and airline tickets online with selection of over 750 airlines to choose from.
There are currently 278,000 hotel rooms offered along with medical travel insurance. OZON.travel celebrates its 5 year anniversary this year.
Sapato.ru – Sapato.ru is online shoe, accessory and apparel retailer. Launched in June 2010, and acquired by OZON Group in February 2012, Sapato.ru offers in total more than 250,000 pairs of women’s, men’s and children’s shoes, as well as apparel, bags and accessories, with selection from over 400 brands.
OZON Solutions – Inspired by GSI and launched by OZON Group, OZON Solutions is a b2b service aimed at helping other companies advance in the field of e-commerce. This new business will aid Russian and international brands with their Internet sales, strategies, technological solutions, order processing and deliveries.
About Sistema
Sistema is the largest publicly-traded diversified holding company in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the Company reported revenues of US$ 35.9 billion for the full year of 2013, and total assets of US$ 43.2 billion as at December 31, 2013. Sistema’s global depository receipts are listed under the symbol “SSA” on the London Stock Exchange. Sistema’s ordinary shares are listed under the symbol “AFKS” on the Moscow Exchange. Sistema was ranked number 308 in the 2013 edition of the Fortune Global 500 list. Website: www.sistema.com
About MTS (Mobile TeleSystems)
Mobile TeleSystems OJSC (“MTS”) is the leading telecommunications group in Russia, Сentral and Eastern Europe, offering mobile and fixed voice, broadband and pay TV in one of the world’s fastest growing regions. Including its subsidiaries, the Group services over 100 million mobile subscribers. The Group has been awarded GSM licenses in Russia, Ukraine, Armenia, Turkmenistan and Belarus, a region that boasts a total population of more than 200 million. Since June 2000, MTS’ Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT). Additional information about the MTS Group can be found at www.mtsgsm.com.

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