In an announcement this morning, Ozon said it was making the deal in order to build a “powerhouse” that could become the dominant force in Russian e-commerce, with CEO Maelle Gavet stating that the two companies were “a strong fit” that could combine to become “the absolute leader” in their category.
Terms of the deal have not been announced, but the major talking point may actually be the speed at which Sapato went from launch to acquisition target.
The company, which has aped the model built by Zappos, was only spun out of Moscow incubator Fast Lane Ventures last year. However, even in that short period, Sapato quickly established itself as one of the biggest noises in the fast-growing Russian market, with more than 2.5 million users — a figure that expansion-hungry Ozon could not resist.
The deal marks Ozon’s first major move since it received a huge $100 million round of funding from a range of investors including Index, ru-net and Japanese web retailers Rakuten. And although the terms of the dea were not disclosed, there is little doubt that Sapato is a substantial purchase — having raised $20 million itself over the last year.
That could mean that the return is only moderate for Sapato’s investors — which include Intel’s venture capital arm — but will surely count as the first major coup for Fast Lane which, while not an outright clone factory, specializes in taking established online business models from elsewhere and building out new services for the Russian market. The group launched 15 sites in the past two years, but selling Sapato may be seen as a watershed.
That captures the sense of opportunity in the former Soviet nation, with a rapidly-growing user base that is now the single largest Internet market in Europe and yet still has plenty of room to expand. Big names like Mail.ru and Yandex have already cashed in with IPOs, and investors see lots of chances to make a killing.
In a broader sense for Ozon, moving into fashion, shoes and accessories certainly adds yet another string to its bow. The site started out selling books, DVDs, and electronics, but in the last year or so it has been expanding by adding a travel site and building out a sophisticated logistics operation.
There’s no small irony that the move echoes Amazon’s purchase of Zappos in 2009 — history seems to be repeating itself — but there’s very little chance that Ozon will stop there.
In an interview back in September, Gavet told me how she wanted to expand the company and turn it into a billion-dollar company, and said that acquisitions were a crucial part of that strategy. It seems there may yet be more to come.