In October 2021, Prosus, the Amsterdam-based tech investment firm, announced its acquisition of Avito, a leading Russian classifieds site, for $6 billion. The deal, which represents one of the largest tech acquisitions in Russia to date, has generated significant buzz in the tech community and beyond.
The Acquisition of Avito
Avito, founded in 2007, has become one of the most popular online marketplaces in Russia, connecting buyers and sellers across a wide range of categories, including real estate, cars, and consumer goods. The site has over 1,000 employees and attracts over 2 billion monthly visits.
Prosus, which is majority-owned by South African media giant Naspers, has been expanding its global reach in recent years, investing in companies like Tencent, Delivery Hero, and Udemy. The acquisition of Avito represents a significant expansion into the Russian market and a major investment in the classifieds space.
The Benefits of the Deal
The acquisition of Avito is expected to bring significant benefits to both Prosus and Avito. For Prosus, the deal provides a major foothold in the Russian market, a key region for growth in the tech industry. It also strengthens Prosus’s position in the online classifieds space, which is rapidly growing as consumers increasingly turn to online marketplaces for buying and selling goods.
For Avito, the deal provides access to Prosus’s expertise and resources, which can help the company to continue to innovate and expand its offerings. It also provides an exit for existing investors, including Russian internet company Mail.ru, which will sell its 29.1% stake in the company as part of the deal.
The Reaction from the Tech Community
The announcement of the Prosus-Avito deal has generated significant reaction from the tech community and beyond. Bloomberg reports that the deal is a significant milestone for the Russian tech industry, which has been growing rapidly in recent years but has struggled to attract major investments from international firms.
Some commentators have expressed concerns about the potential for regulatory scrutiny of the deal, given the increasing focus on antitrust issues in the tech industry. Others have raised questions about the valuation of the deal, given the current economic climate and uncertainty in the global market.
The acquisition of Avito by Prosus represents a major investment in the Russian tech industry and the online classifieds space. The deal is expected to bring significant benefits to both companies, and it has generated significant reaction from the tech community and beyond. While some concerns remain about the potential for regulatory scrutiny and valuation, the deal underscores the continued growth and expansion of the tech industry globally.
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