Tvigle.ru, a major Russian video entertainment portal on the Russian Internet, closed a capital increase operation last week with PromSvyazCapital, the investment arm of PromSvyazBank, a leading Russian bank.
PromSvyazCapital acquired a 27.7% stake for approximately $8 million, a source close to the deal told East-West Digital News.
“This will allow us to enrich Tvigle’s content offer, expand further across the Russian regions and develop an alternative distribution approach, including connected TV and set top boxes,” Tvigle founder and CEO Egor Yakovlev said in an exchange with EWDN. “In the long term, we aim to consolidate our leadership among video portals with licensed content on the fast-growing online video market in Russia.”
A former executive of major IT and media companies, Yakovlev founded Tvigle in 2007 with partner Pavel Cherkashin, formerly the CEO of Adobe Russia. The company raised around $5 million in its early stages from Allianz-Rosno Asset Management and became the first legal professional video portal in Russia.
Today, Tvigle has a total content base of over 20,000 long and short videos, all under license agreements, including Russian and international TV series, cartoons, shows and clips. Tvigle claims it is the only player on the Russian market to produce a portion of its video content.
In addition to its own portal Tvigle.ru, the company’s video syndication network comprises over 200 partners. In 2011, according to TNS, the Tvigle network reaches an average monthly audience of 8 million Russian users between the ages of 12 and 54.
Tvigle’s business model relies exclusively on video advertising, a market which topped $18 million in 2010 and could grow as much as ten fold in the coming years. Tvigle reached breakeven in late 2009 and generated around $3 million in revenues in 2010, according to EWDN’s source.
PromSvyazCapital owns significant assets in the fields of financial services, IT and telecom as well as a variety of print media including popular newspapers Argumenty i Fakty, Trud and Extra M, a classifieds publication. The investment in Tvigle could reflect further ambitions in the sphere of electronic media.
41 million Russian unique viewers watched 4 billion videos online in May 2011, said Yakovlev, referring to Comscore estimates, which does not include user activity on leading Russian social network Vkontakte.ru. The average Russian viewer currently spends 9.3 hours a month watching videos and this figure is expected to continue growing.
The trend is supported by growing broadband penetration in the Russia. According to TNS Gallup, in January 2011, in Russian cities of 100,000 inhabitants or more an average of 65% of Russian Internet users twelve or older have a broadband Internet connection at home, with 70% in Moscow, 71% in St. Petersburg and 81% in Yekaterinburg.
