The Avito service plans to reach 70% profitability

The Avito service plans to reach 70% profitability Russian service of free announces Avito has a new aim – the service, now estimated in $571M, can reach 70% profitability at EBITDA. Two years ago management of the service wanted to reach evaluation in $1B, but now they move the bar upwards: for comparison – profitability by this index of the largest Russian Internet-companies Yandex and Group does not exceed 55%.

As it is said in the published report of one of the service owners – Sweden Vostok Nafta – Avito looks forward to reach 70% profitability by EBITDA, as it is specific to “adult” online classifiers. According to the results of half year, Avito`s profitability exceeded 30%, and this index could be significantly higher, if not marketing expenses: in spring the resource has held a mass advertisement campaign on TV. Profitability of Avito for the first half year is not disclosed.

High hopes Avito and its owners lay on further Internet implementation in RF. There are 75 million of users in the country, and mid-term in increases up to 95 millions. Sweden analogue of Avito – – earns at each user more than €10, Norwegian - €35, notes Vostok Nafta; its profitability in the first half year is 50%, as it is stated in the owner`s report.

Since 2007 Avito attracted in total $170M of investments. At the moment its shareholders in particular are Sweden Kinnevik, Northzone, британская Accel Partners, and Baring Vostok Private Equity Fund IV. Up to now the service showed net loss. But this year the resource should lastly become profitable, said management.