IVI raises $250 mln in new capital to strengthen market leadership
IVI has closed a new funding round of $250 million from both external investors and current shareholders.
The group of new investors was led by VTB and includes Invest AG and Millhouse. Flashpoint Venture Capital, Baring Vostok and the Russian Direct Investment Fund (RDIF) with its partners were among the current shareholders who participated in the raise. As a result of the funding round, VTB will become one of IVI’s largest shareholders, alongside Baring Vostok, RTP Global and Flashpoint, and will be represented on IVI’s Board of Directors.
The deal is the largest private equity transaction in Russia’s tech sector in recent years, illustrating the high level of interest among investors in the fast-growing online video market, with a focus on high-quality content, and also underscoring IVI’s market leadership. The funds raised will be used to further expand IVI’s content offering and production of own content, as well as further development of IVI’s advanced technological platform and marketing initiatives. Goldman Sachs International and Latham & Watkins acted as exclusive financial and legal advisors to IVI, respectively.
“The media industry is undergoing a radical transformation. IVI is continuing to strengthen its leadership in video streaming and is focused on creating the best product offering for Russian-speaking audiences. The funds from this round will be used to expand our content catalogue, and to create a broad base for producing original content and attract top talent. We are creating the right conditions for content producers to monetise their best creative ideas by creating engaging and relevant stories for our users. We are also continuing to focus on further enhancing our service and user experience.”
“Our country has the largest Internet user base in Europe, and as a result digital transformation and the transition to online business create tremendous opportunities for dynamic companies that are national champions in the digital services space. This deal is another important step in the development of an open ecosystem that is being formed organically through the creation of strategic partnerships between VTB Group and other leading companies in their market segments.”
“As one of IVI’s early investors, Flashpoint is delighted that the company has made such great progress in its development and is able to raise capital from institutional investors while maintaining its market leadership. We confidently continue to support IVI in this funding round, understanding the further growth potential of both the market and the company.”
“As one of the first investors and the largest shareholder in IVI, Baring Vostok sees significant potential for further growth of the company’s business, based on users’ demand to watch the high-quality and varied content that IVI offers in the most convenient way. We will continue to support the team with raising the funding it needs, strengthening corporate governance and with strategic and other issues.”
“These investments by RDIF and its partners will support the business growth of a leading Russian online video streaming service, which has an audience of more than 50 million unique users per month. IVIA is a leader in its segment of the fast-growing Russian digital services market, and has significant growth potential both through collaboration with leading global studios and through production of own content.”
Denis Denisov, EM
IVI is the #1 online video streaming platform in Russia with an over 30% market share (according to TMT Consulting data for 2020). The streaming service audience exceeds 50 million unique monthly users. IVI presents the widest professional catalogue of films, TV series and animation. In total, the IVI catalogue contains more than 100 thousand content items from all 6 Hollywood major studios, as well as more than 400 Russian and international studios. IVI’s investors include Baring Vostok funds, RTP Global, Flashpoint, Winter Capital, the Russian Direct Investment Fund (RDIF), Mubadala and others.
VTB Bank (PJSC), its subsidiary banks and financial organisations (VTB Group) are an international financial group, offering a wide range of financial and banking services and products in Russia, the CIS, and select countries of Europe, Asia, and Africa. VTB Bank provides a full range of banking services through a wide network of branches. Its subsidiary organisations offer insurance, leasing, factoring and other financial services. VTB Group has the most extensive international network of any Russian bank, with more than 20 banks and financial companies operating in more than 20 countries. As of 31 December 2020, the Group was the second largest financial group in Russia by assets (RUB 18.1 trillion) and by customer accounts (RUB 12.8 trillion). The Government of the Russian Federation is VTB Group’s main shareholder and owns 60.9% of the voting shares through the Federal Property Management Agency. For more information, please visit www.vtb.com
Baring Vostok is a leading private equity firm investing focused primarily on investments in Russia and CIS countries. Baring Vostok funds’ long-standing investors include pension funds and university endowments, sovereign wealth funds, as well as funds of funds from North America, Western Europe, Asia and the Middle East. Over the past 27 years, Baring Vostok funds have invested approximately $3.7 billion in around 87 companies in Russia / CIS and other countries in the region. Its portfolio companies make up an ecosystem of first-class Russian companies that boast leading positions in Russia and beyond, including OZON, IVI, VkusVill, Familia, Solopharm, Skyeng and Viasat among many others.
Russian Direct Investment Fund (RDIF) is Russia’s sovereign wealth fund established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF’s management company is based in Moscow. Currently, RDIF has experience of the successful joint implementation of more than 80 projects with foreign partners totaling more than RUB2 tn and covering 95% of the regions of the Russian Federation. RDIF portfolio companies employ more than 800,000 people and generate revenues which equate to more than 6% of Russia’s GDP. RDIF has established joint strategic partnerships with leading international co-investors from more than 18 countries that total more than $40 bn. Further information can be found at rdif.ru
Flashpoint is an international investment group with US$350m AuM. Flashpoint manages six venture funds: three VC funds, a Venture Debt Fund, a Secondary Fund and the seed Phystech Leadership Fund. Investors in Flashpoint’s funds include more than 70 major family offices, high-income organisations and HNWIs. The company has offices in Moscow, London, Budapest, Warsaw, Riga and Tel Aviv. The funds have made investments in 32 companies including names such as IVI, Guesty, Dostavista and Chili Piper. Flashpoint has completed nine exits, including the sale of its stakes in Shazam (to Apple), Chess.com (to Mark Scheinberg, founder of PokerStars), Ponominalu (to MTS), Netology (to Severgroup), GetIntent (to Gazprom Media).https://flashpointvc.com