This story initially appeared in East-West Digital News, an international news resource covering the Russian innovation scene.
Russian online video major ivi.ru has attracted debt financing for the first time. As reported by business daily Vedomosti, the company received a six-year venture loan from Alfa Bank, amounting to RUR 3.7 bln (some $54 mio at the current exchange rate, a considerable sum by local standards).
In addition to the share collateral, the bank has been granted an option to purchase 2.5% of ivi’s shares at a predetermined price.
So far, the video platform relied heavily on venture financing. Less than a year ago, a group of top Russian and foreign investors injected $40 mio into ivi.ru. Earlier rounds included:
- An initial $30 mio capital injection from from ru-Net (the previous name for RTP Global), Tiger Global Management and Frontier Ventures in 2010;
- A second round of funding, in 2012, which provided $40 mio from the same investors and Baring Vostok, the famous US-led private equity firm;
- A $3.5 mio round secured in 2015 from Buran Venture Capital.
The company is now considering public, as reported a few months ago.
Hot video market
In 2019, the Russian online video market reached to RUR 17.1 bln ($265 mio at the average exchange rate of that year), up 50% from the previous year, according to TMT Consulting.
This market did not exceed RUR 1 bln in 2013 and $30 mio in 2011 (see EWDN’s industry report).
At the beginning, the business model of Russian online video platforms relied primarily on advertising revenues. However, in 2017, user-generated revenues exceeded advertising revenue. Since then, the share of user-generated revenues has grown constantly, wrote Vedomosti.
In the first half of 2019, this share reached 70% of total revenues.