In its pursuit of leadership in the Russian online travel
market, online hotel booking service Ostrovok.ru has raised $25 million – its
fourth fundraising operation in less than two years.
General Catalyst Partners has led the round, with
participation from Accel Partners and Russia’s Frontier Ventures as well as
from Russian billionaire Yuri Milner, ex-Expedia CEO Eric Blachford, former UBS
Russia head Edward Kaufman, and US business angel Shervin Pishevar.
The startup’s co-founder Serge Faguet told The Next Web that
he, together with the other co-founder Kirill Makharinsky, contributed $2
million of their own money in this investment round.
“We’re in it for the long haul,” Faguet said, “and we will
likely close more funding rounds, potentially even raise hundreds of millions
of dollars in the next few years. We’re really serious about turning Ostrovok
into a multi-billion dollar company over time.”
Faguet is a Russian-born entrepreneur and Stanford GSB
graduate. Before creating Ostrovok, he worked as an analyst at Google, then
founded TokBox, a web-based group video communications provider.
Makharinsky describes himself as a “data virtuoso.” After studying
at Eton, then Oxford, he co-founded YouNoodle, an online platform to develop
the startup ecosystem; and Quid, a provider of data on innovation and emerging
4 rounds of funding in 2 years
Launched back in 2010, Ostrovok – “island” in Russian – was
initially designed as a flash sales site for travel. In the spring of 2011 –
after switching to a classic hotel booking concept – the site secured $1
million from General Catalyst Partners, Kite Ventures and business angels.
Just three months later, in July 2011, Ostrovok raised
another $13.6 million from General Catalyst Partners, AccelPartners, Founders
Fund and Atomico Ventures as well as from prominent Western business angels.
The startup closed its third round of funding in early 2012,
with Blachfold and other angel investors bringing in an undisclosed amount.
So far, Ostrovok has reached 135,000 hotels across the
globe, including 4,800 in Russia and neighboring countries – less than what is
claimed by its competitor Oktogo.ru, which has just raised $11 million from
leading Western and Russian venture funds.
Another strong player, Ozon Travel, is the specialized arm
of Ozon.ru, a leading Russian e-commerce player.
Booking.com and some other foreign players also have strong
traction in Russia. The domestic online hotel booking market has been estimated
by Data Insight at $900 million in 2012.
First published in East-West Digital News.
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