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Russia's Wikimart seeks $40M despite 'complicated' Ukraine situation

Old Soviet kopecks, used during the USSR era.

Above: Old Soviet kopecks, used during the USSR era.

Image Credit: Sean Ludwig/VentureBeat

Russian e-commerce site Wikimart hopes to raise “$40 million or more” later this year or in early 2015, co-founder Maxim Faldin said earlier this week to Russian business daily Vedomosti.

“We’re not in a hurry because the market situation is unclear,” Faldin said, citing the “complications” which have followed the Russia-Ukraine crisis and the ruble’s fall in recent months. However, many domestic investors are currently considering investing in e-commerce, the entrepreneur believes.

The Russian e-commerce industry is still showing high growth rates — nearly 30 percent last year, as a study by East-West Digital News reveals — in a context of quasi-stagnation of the economy.

The company needs a capital injection to develop in Russia’s regions (a growing part of the domestic market), improve its supply chains and potentially buy competitors. Wikimart also intends to further enhance its new cross-border sales business.

Wikimart.ru was launched in 2008 by Maxim Faldin and Kamil Kurmakayev, two Russian students at Stanford University, with the initial ambition of creating a Russian analog of eBay. The project has been heavily funded by major US investment funds – including a $30 million round in 2012.

The startup has now become a significant marketplace with nearly 1.8 million items from 6,125 merchants in late March. Wikimart, which takes a commission on each actual order, also provides merchants with additional call center and marketing services. It claims to call “every client” to check that he or she has been served satisfactorily by the merchant.

Included in the catalog are also Wikimart’s own offers. The company has a 5,000 sq. meter warehouse in Podolsk, in the Moscow region, with a storage capacity of 30,000 SKUs.

Wikimart claims sales of $150 million in 2013 and expects to them reach $260 million this year.

As EWDN reported recently, two other Russian online retailers, Ozon and Ulmart, are also holding discussions with investors. Ozon is a pioneering e-commerce holding with notable similarities to Amazon.com. Ulmart is a hybrid online-offline retailer of computers, home electronics and household appliances.

 

This article originally appeared in East-West Digital News, our partner in Russia.

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