Ostrovok, Russia's Fastest-Growing Online Travel Company, Secures $13.6 Million in Funding

MOSCOW, July 12, 2011 /PRNewswire/ -- Ostrovok, the hotels-focused online travel website for Russian consumers that has become one of Russia's fastest-growing e-commerce companies, announced today that it has raised $13.6 million in Series A funding, led by General Catalyst Partners and Accel Partners and including more than a dozen top-tier venture capital firms and angels. The funding brings the company's valuation to more than $35 million.

"This impressive show of faith from some of the world's savviest investors truly symbolizes that Russia has 'arrived' in the world of technology," says Serge Faguet, CEO and co-founder of Ostrovok. There are 300 million Russian-speaking consumers in the world — a population that boasts explosive technology adoption as well as a higher rate of disposable income than American middle-class consumers on average due to low levels of consumer debt.

Yet Russia remains the only major global economy that does not have a trusted online solution for travel. "With Ostrovok, we have identified a virtually untapped market," says Faguet.

Ostrovok was founded in late 2010 by 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 more than $30 million to date from top-tier funds including Sequoia Capital and Founders Fund.

The founders are focused on building the first-ever "Silicon Valley-type" company in Moscow, with emphasis on superior user experience, a stellar engineering and marketing team, strategic business partnerships and adoption of best work and company culture practices from successful tech startups.

In addition to General Catalyst Partners (who were early investors in Kayak and ITA Software) and Accel Partners (Facebook, Groupon), investors in the Series A round include: Peter Thiel and Founders Fund (Facebook); Niklas Zennstrom and Atomico (Skype); Mark Pincus (founder of Zynga); Esther Dyson (Yandex board member); Fritz Demopoulos (founder of Qunar); Sebastian de Halleux (Playfish); Naval Ravikant (Epinions, AngelList); Felix Shpilman (DST); Scott Banister (Ironport, Slide); James Hong (Hotornot); and Sam Shank (Hoteltonight). Ostrovok.ru was advised by Orrick, Herrington & Sutcliffe during this funding round.

"Online travel is an undisputed leader in global e-commerce — more than 40 percent of all money spent online is spent on travel," says Joel Cutler, managing director of General Catalyst Partners. "With the leadership of Kirill and Serge, both of whom have brilliant track records in turning pioneering technology into commercially viable companies, Ostrovok is in a great position to become one of the biggest and most successful Russian Internet companies operating today."

"Ostrovok's founders are laser-focused on what the Russian consumer market desperately needs: a simple, user-friendly internet product that lets consumers book hotel rooms at competitive prices anywhere in the world," says Jeremiah Daly, principal at Accel Partners. "They're building it with the best content, technology, marketing and people in the country — and they're literally doing it in a space where there is very little competition. I foresee strong growth for Ostrovok, and along with my co-investors plan to invest considerable additional resources to support their growth."

About Ostrovok

Ostrovok.ru is one of the fastest-growing e-commerce companies in Russia, backed by Accel Partners, General Catalyst Partners, Peter Thiel/Founders Fund and Niklas Zennstrom/Atomico. Based in Moscow, Russia, Ostrovok.ru is building the best online travel experience for Russian consumers to book hotel rooms around the world. www.ostrovok.ru

SOURCE Ostrovok