Babyboom.ru, a Russian children’s goods website, has raised $900,000 from investors including Index Ventures and Team Europe Ventures as well as from business angels Chamath Palihapitiya, VP of Facebook, Fabrice Grinda, the founder of OLX, Jose Marin, the founder of IG Expansion and James Gutierrez, the founder of Progreso Financiero.
Grinda and Marin have also recently invested in other Russian startups Oktogo.ru, an online hotel booking site, Wikimart.ru, an e-commerce platform, and HipWay.ru, a site offering niche tourism products.
Wikimart founders Maxim Faldin and Kamil Kurmakaev assisted the Babyboom team in the fund raising operation.
Babyboom.ru was founded last year on an underdeveloped market by serial entrepreneur Sergey Kopylov and two former consultants, Evgeny Loginov from BCG and Sergey Glushkin from Bain.
The site stands to benefit from increasing demand in Russian e-commerce, which is growing by approximately 40% annually, and from fragmented and generally poor supply.
Other powerful players, however, have positioned themselves on this market recently. Russia’s leading e-commerce player Ozon.ru – which counts Index Ventures among its shareholders – has a section dedicated to children’s goods and considers its development a priority. Prominent offline retailer Detskiy Mir resumed its online sales in late 2010. Otto Group, the world’s leading distance sales company with a strong presence in Russia, also entered the market last year under the brand Mytoys.ru.
The $900,000 investment will help Babyboom.ru build its team, increase its offering, develop its product and technology platform and grow sales.
Babyboom founders have said to EWDN that they aimed to “become the Diaspers.com of Russia, primarily in terms of trust from moms and market leadership.” According to their business plan for this year, they expect to generate “as much revenue as the current market leaders.”
This would represent from $5 million to $10 million, market experts said to EWDN.
The offline children’s goods market is currently estimated at up to $17 billion, according to Glushkin. The online market could amount to $300 million, calculated Insales.ru, a provider of ecommerce solutions.