KupiVIP, Russia’s largest private members shopping club for designer fashion and luxury brands, has landed $55 million in third round funding, something that appears to be a record for the Russian e-commerce sector. Three new investors participated in the funding: Balderton Capital, Bessemer Venture Partners and Russia Partners. The new investors join existing investors including Accel Partners and Mangrove Capital Partners.
The site will use the funding to move into selling consumer goods as continuing with discount offers, mashing up Amazon’s and Vente Privee’s model. A white label platform will act as a way for Western retail brands to launch stores in Russia and the former Soviet states. This will be useful. Western firms have found it very hard to break into the Russian ecommerce market. 11 out of the 15 top internet sites are Russian.
KupiVIP says it has seven million registered members and revenues have been growing 600% year on year. Although online advertising and ecommerce has lagged Europe – but there is an uptick underway.
Russia is poised to overtake Germany as the largest Internet market in Europe with 60m users (out of a population of 142m). Germany has 90-100 million in population in the DAUCH region.
Internet usage is Russia is growing 30% YOY and Ecommerce 35%.
It’s also fair to say that despite its wild-west image, a high profile IPO by mail.ru creating a $5.7bn mkt cap show that Russia is going to be a gangbuster market in Europe. Not for the faint hearted however…
KupiVIP is headquartered in Moscow and was founded by 28-year-old Oskar Hartmann, a German-born entrepreneur. Hartmann says “KupiVIP has only begun to scratch the surface.” The company has 750 staff.