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Hotel booking service Oktogo.ru receives $ 11 mln investment

0 14 March 2013

hotelVictor Sazhin Group (VSG) has become the latest co-owner of the Russian online hotel reservations agency Oktogo.ru, after being the main contributor in the $ 11 million investment made recently. VSG acted as the lead-investor, but current co-owners of the service VTB Capital and European funds Mangrove Capital Partners and Ventech also participated.

This is the third investment round for Oktogo and the second largest transaction ever made in the Russian segment of online-travel (in July 2011 Ostrovok.ru raised $ 13.6 million from General Catalyst Partners, Accel Partners and other investors). Back in April 2011, Mangrove Capital Partners, ABRT and Ventech had bought more than 20% of Oktogo’s shares for $ 5 million, but less in controlling interest. In February of last year, VTB Capital joined the list of investors in the company, buying 30% of shares with a $ 10 million investment; if back then the whole service was estimated at $ 30 million, this round’s value and the shareholder structure have not been disclosed.

Oktogo began operating in the second half of 2010. According to the company’s data, it has a base of more than 5,000 Russian hotels and 250,000 hotels worldwide; its monthly audience surpasses 1 million people and the average check is $ 400. The service earns a commission from hotels for every client, ranging between 10-20% and, in 2011, Oktogo’s revenues were $ 10 million. The service’s founder and General Director Marina Kolesnik predicted that, in 2012, this would grow to $ 30 and the result was allegedly close to this forecast. For 2013, Oktogo should show a several fold revenue increase. Although the project has so far been unprofitable, admitted the CEO, it plans to have an operating margin by the end of this year. Interestingly, the segment of online hotel reservation on Runet is growing by 70% per annum, with the potential of reaching 3 billion by 2015.

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