Why 2GIS first attracted equity financing, changing the long-term strategy
2GIS attracted $ 40 million of investments from Baring Vostok and ru-Net funds. The funds will be invested in the development of 2GIS products, active promotion in Moscow, St. Petersburg and other large cities of Russia, as well as the launch of services in international emerging markets. Following the transaction, the funds received a minority stake in the company, 2GIS said in a statement .
Earlier, the founder of 2GIS, Alexander Sysoev, adhered to the following principle: (quote from Tony Shea from Zappos): "If you have the opportunity to develop without funds, do it to the last."
Why did he change his mind? Besides him, this question can only give a tentative answer to some facts.
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“Cartographic service in the world is not normally monetized by anyone. We earn the most in the world and started doing it first. ” In 2013, 2GIS earned 3 billion rubles, Sysoev reported last year.
But the sharp increase in the scale of the 2GIS business in 2009–2012 required a large investment in infrastructure and personnel from the company. At the end of 2014, DoubleGIS bought out 12 floors of the building for a Sberbank loan. The new office of the company was equipped “in the spirit of the best IT-companies in the world”.
The company selects potentially interesting cities to launch 2GIS, and then finds a local partner who is ready to develop business in this locality. The average cost of a franchise in Russia is $ 200 thousand. Despite the devaluation of the ruble, the declared cost of entering the 2GIS business has not decreased. Now on each transaction the company loses due to the difference in the course.
Sysoev is not looking for partners abroad, they turn on their own. According to the head of DoubleGIS, the cost of launching 2GIS in a million city abroad starts at $ 1.5 million. There are already projects in Limassol (Cyprus), Santiago (Chile), Prague (Czech Republic), Dubai (United Arab Emirates). None of them came to payback. "While this is an experiment, the development of technology," says Sysoev.
2GIS President Vera Garmash:
In February, Forbes estimated the cost of 100% of 2GIS at $ 150 million, putting it on the 17th place in the rating of the “20 Most Expensive Runet Companies”. In a deal with Baring Vostok and ru-Net, the company was valued above $ 150 million, a 2GIS representative assures. Thus, the share of funds in 2GIS does not exceed 26.7%, Kommersant writes .
“The foundation team was impressed with the wide coverage and high frequency of using mobile applications and the 2GIS website, which shows the relevance of the product to users,” notes Elena Ivashentseva, senior partner of Baring Vostok Capital Partners.
“By focusing on data quality and their completeness, 2GIS managed to build one of the most popular consumer Internet services,” commented Leonid Boguslavsky, the founder of ru-Net. “With the growth of the mobile Internet, the local search and navigation market is developing very rapidly around the world, and 2GIS already occupies one of the leading positions in it”.
The head office of 2GIS is located in Novosibirsk. Today 2GIS covers more than 280 cities in 8 countries, mainly in Russia, as well as in Kazakhstan, Cyprus, Italy, the United Arab Emirates, Ukraine, the Czech Republic and Chile. The audience of 2GIS exceeds 41 million users per month, of which more than 27 million are from the online version and 2GIS applications, 14 million from partner sites that use 2GIS data.
Over 38,000 advertisers use 2GIS to attract customers. In many cases, 2GIS turns out to be the most effective channel to attract a local audience. The total sales of advertising in 2014 exceeded 4 billion rubles.
Earlier, the founder of 2GIS, Alexander Sysoev, adhered to the following principle: (quote from Tony Shea from Zappos): "If you have the opportunity to develop without funds, do it to the last."
Why did he change his mind? Besides him, this question can only give a tentative answer to some facts.
')
“Cartographic service in the world is not normally monetized by anyone. We earn the most in the world and started doing it first. ” In 2013, 2GIS earned 3 billion rubles, Sysoev reported last year.
But the sharp increase in the scale of the 2GIS business in 2009–2012 required a large investment in infrastructure and personnel from the company. At the end of 2014, DoubleGIS bought out 12 floors of the building for a Sberbank loan. The new office of the company was equipped “in the spirit of the best IT-companies in the world”.
The company selects potentially interesting cities to launch 2GIS, and then finds a local partner who is ready to develop business in this locality. The average cost of a franchise in Russia is $ 200 thousand. Despite the devaluation of the ruble, the declared cost of entering the 2GIS business has not decreased. Now on each transaction the company loses due to the difference in the course.
Sysoev is not looking for partners abroad, they turn on their own. According to the head of DoubleGIS, the cost of launching 2GIS in a million city abroad starts at $ 1.5 million. There are already projects in Limassol (Cyprus), Santiago (Chile), Prague (Czech Republic), Dubai (United Arab Emirates). None of them came to payback. "While this is an experiment, the development of technology," says Sysoev.
2GIS President Vera Garmash:
Earlier, 2GIS developed without attracting equity financing, we used our own and credit resources. We managed to achieve a lot, in particular, 2GIS entered the top ten largest companies of Runet. We have approached a new stage in the history of the company - we intend to strengthen the promotion of the service in the European part of Russia, open our own branches abroad, complementing the existing franchise business, and more actively develop our own product development. For these purposes we attract investors. I am grateful to our partners for the high assessment of the potential of 2GIS.
In February, Forbes estimated the cost of 100% of 2GIS at $ 150 million, putting it on the 17th place in the rating of the “20 Most Expensive Runet Companies”. In a deal with Baring Vostok and ru-Net, the company was valued above $ 150 million, a 2GIS representative assures. Thus, the share of funds in 2GIS does not exceed 26.7%, Kommersant writes .
“The foundation team was impressed with the wide coverage and high frequency of using mobile applications and the 2GIS website, which shows the relevance of the product to users,” notes Elena Ivashentseva, senior partner of Baring Vostok Capital Partners.
“By focusing on data quality and their completeness, 2GIS managed to build one of the most popular consumer Internet services,” commented Leonid Boguslavsky, the founder of ru-Net. “With the growth of the mobile Internet, the local search and navigation market is developing very rapidly around the world, and 2GIS already occupies one of the leading positions in it”.
The head office of 2GIS is located in Novosibirsk. Today 2GIS covers more than 280 cities in 8 countries, mainly in Russia, as well as in Kazakhstan, Cyprus, Italy, the United Arab Emirates, Ukraine, the Czech Republic and Chile. The audience of 2GIS exceeds 41 million users per month, of which more than 27 million are from the online version and 2GIS applications, 14 million from partner sites that use 2GIS data.
Over 38,000 advertisers use 2GIS to attract customers. In many cases, 2GIS turns out to be the most effective channel to attract a local audience. The total sales of advertising in 2014 exceeded 4 billion rubles.
Source: https://habr.com/ru/post/295758/
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