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Oktogo raises $5m and switches to Travel.ru

0 16 December 2013

Competition in the saturated Russian online travel sector is fierce, and one of the main players last week took the dramatic step of a complete rebranding as it seeks to differentiate itself from its rivals.

Skolkovo resident Oktogo, which was supposed to be read OK-to-go (a fact lost on many), has adopted the name Travel.ru, and launched a new site which combines booking services with travel information. 

The move was made possible by the $2 million acquisition in September of Travel.ru, which provides tourist information for Russian travellers (think Lonely Planet / Rough Guides). The new Travel.ru combines this content (which is both in house and user generated) with options to book hotels (Oktogo's main service), airfares and tours.

The rebranding is also accompanied by an injection of $5 million in a round led by VEB Innovations, a fund established by the state-owned Vneshekonombank specifically to fund Skolkovo projects. An unnamed ‘inside source’ said that VEB provided around half the round, with previous investors contributing the rest. 

This takes the total investment raised by the project over $30 million since it was launched in 2010, with stakeholders including Mangrove, Ventech and VTB Capital

The old Oktogo had a ‘base’ of 8,000 hotels in Russia and the former CIS, and a further 350,000 around the world, and was used by a monthly audience of over $1m, while its clients spent an average of $400 on the site. The team behind the project hope that the new site, with its broader business model, will attract both a larger audience and increase the project’s potential to earn from advertising. This should significantly boost the company’s revenue, which was $10 million in 2011, $30 million in 2012 and forecast to be “three times higher” in 2013. 

At present, Booking.com holds the leading position in the Russian travel market, while OneTwoTripOstrovok and Travelata are also major players. The sector has spawned a lot of projects, and raised a lot of investment in the last couple of years. In a recent report, we asked whether it was a “bubble waiting to burst”. With over $50 million injected in travel projects this year, investors clearly don’t think so. 

Sources: Tech Crunch, ComNews

Top image by Shutterstock

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