MOSCOW, Russia, March 27 – Ostrovok.ru, the leading Russian hotel booking service, has attracted a new round of investment totaling $25 million, making it the best-capitalized online travel company in Russia. Prominent international venture capital fund General Catalyst Partners led the financing, with participation from Frontier Ventures, Accel Partners, and leading global technology investor Yuri Milner.
Among the other investors that participated in this round are the former CEO of Expedia Eric Blachford, Country CEO for Credit Suisse Russia Steve Hellman, Silicon Valley investor Shervin Pishevar, as well as the former head of UBS Russia and Alfa-Bank’s Investment Banking Division Edward Kaufman. All capital has been primary and went into the company.
The Series B funding round will help Ostrovok continue developing its existing as well as new products, such as a third-party API to integrate Ostrovok’s inventory and accelerate sales across partner networks. In 2012 Ostrovok launched mobile applications for iOS and Android and features allowing customers to pay for hotels in cash without having to use a credit card. Given its unique position in the CIS markets, Ostrovok’s API is currently used by major partners such as MegaFon, Hotelscombined, Tripadvisor, Sheremetyevo airport, Aviasales, Kayak and others.
In addition to product development, Ostrovok also plans to use the funds for business expansion, such as adding members to its sales team and putting more resources toward its high level of customer service, in order to maintain the best prices and room availability in popular destinations for Russians globally. In 2013 Ostrovok.ru plans to become the leading service based on the number of bookable hotels in the Former USSR.
Ostrovok was founded in late 2010 by Serge Faguet and Kirill Makharinsky, both Russian entrepreneurs who studied at Stanford and Oxford Universities, worked at Google and Slide, and founded Silicon Valley companies Tokbox, YouNoodle and Quid, which have raised capital from top-tier funds including Sequoia Capital and Founders Fund.
Today, Ostrovok is an easy to use and reliable service for making hotel bookings, which attracts more than two million visits every month. Ostrovok offers its users a selection of more than 135,000 hotels in 200 countries around the world. Over the past eighteen months, Ostrovok signed direct agreements with over 4,800 hotels in Russia and the CIS, by far surpassing existing local players as the leading hotel booking service. This year, Ostrovok plans to establish direct connections with hotels in Europe, Asia, and the United States.
“We are very happy to both welcome new investors into Ostrovok and see our existing partners continue to invest. We value the fact that they share our goal and confidence in building the leading travel brand in Russia,” say Serge Faguet and Kirill Makharinsky, the founders of Ostrovok.
“It is especially important that we have received support from both top-tier investors here in Russia, as well as the most experienced investors in the online travel industry in the world. In 2013 we plan to become the leader in direct hotel availability in Russia and the CIS, and continue improving our products across all platforms. Today tens of thousands of people use Ostrovok every day and it is important for us to stay ahead in providing them with the absolute best availability and rates on those hotels.”
“Online hotel booking services is one of the largest, fastest-growing and most profitable parts of the online travel business,” says Dmitry Alimov, Founder and Managing Partner of Frontier Ventures, “we are happy to support Ostrovok, and will help the team build the best product for the Russian consumers.” Frontier Ventures is backed by the co-founders of Digital Sky Technologies and Mail.ru Group Gregory Finger (member of Frontier Ventures’ Investment Committee and Advisory Board) and Michael Vinchel (investor in Frontier Ventures).
“We are familiar with many global OTA players and are very impressed with the progress of the Ostrovok team in building the winning travel company in the Russian speaking world,” says Joel Cutler, Partner of General Catalyst. “Ostrovok is creating a long-term business, focusing primarily on their clients and their local preferences”.
“The persistence, commitment and strategic vision of the team have allowed them to create a successfully developing company,” said Yuri Milner.
Ostrovok.ru is one of the fastest-growing e-commerce companies in Russia, backed by Accel Partners, General Catalyst Partners, Peter Thiel/Founders Fund, Yuri Milner and many other notable investors. Based in Moscow, Russia, Ostrovok.ru has over 200 employees and is building the largest base network of hotels across Russia and the CIS to provide the best online travel experience for Russian-speaking consumers looking to book hotel rooms.www.ostrovok.ru