LitRes, a leading online retailer of Russian language e-books, has raised $5 million from Russian Internet Technology Fund (RITF), a $50 million fund established earlier this year. The company’s valuation has not been disclosed, but the fund stated that it had received “a significant stake” in the company.

With $7 million in sales in 2012, LitRes is the leader on a market that may reach approximately $15 million this year, the fund’s press service told East-West Digital News. This represents less than 1% of the overall Russian book market, while e-book sales account for 25% of the total book market in the US.

The Russian e-book market’s expected growth will be fuelled by a higher Internet penetration rate (just 60% as of late 2013), while book readers will progressively migrate to electronic formats.

Furthermore, the tightening of the country’s anti-piracy legislation is likely to favor such legitimate industry players as LitRes.

RITF thus expects the market to reach 3 billion rubles (approximately $100 million), or 5% of the overall book market, by 2017.

One of the very first movers on the market – the company was founded in 2006 – LitRes now faces growing competition from such domestic players as Imobilco.ru and Ozon.ru, as well as potential pressure from international players such as Amazon.

The funding will help LitRes “enhance customer services, invest in promotion and marketing, develop new projects and increase the assortment of e-books available from its online and mobile platforms,” the fund stated.

LitRes now offers more than 380,000 e-books in Russian and other languages. The company distributes e-books and audio books through its website, as well as through mobile applications, Smart TV platforms and an extensive network of partners.

“The fact that RITF is becoming a shareholder of LitRes will strengthen and enhance our corporate governance standards and thus increase the market value of the company. Today we should establish a solid base for our future growth and market leadership,” said LitRes CEO Sergey Anuriev.

“In the short term, we plan to increase the number of customers using LitRes mobile applications and web-services, further develop our services and launch new projects aimed at making the process of choosing, obtaining and reading a book more comfortable,” he added.

The Russian Internet Technology Fund was established with the participation of Third Rome, a diversified group of companies involved in asset management, investment consulting, and trading.

The fund targets Russian Internet and IT-companies at the growth stage, providing up to $5 million to each company. There are no specific restrictions for investments in Internet and IT related sectors. As of today, the Fund has already made “a number of investments that total approximately $10 million,” including one in SaaS accounting startup MoeDelo.org.