iTech Capital, a Russian PE & VC fund, announced today an investment of $10 million in, a leading search engine for flights and hotel bookings. The terms of the deal have not been disclosed, but the fund told East-West Digital News that it had obtained a stake of less than 30%.

The company – which is attracting venture money for the first time – will invest in developing its key products: the Aviasales Russian search engine and its international version, JetRadar – a Thai version of which was launched recently – as well as the Hotellook hospitality project and the Travelpayouts affiliate network.

Aviasales’ core service helps users compare airfares and hotel options from more than 100 online travel agencies and over 60 carriers. Users are then redirected to the selected seller’s website to complete and pay for a booking.

Aviasales claims more than 4 million unique visitors monthly and 500,000 search queries for tickets every day. About 27% of the queries are made from smartphones and tablets.

Competing with such companies as Kayak, Momondo and Skyscanner, the Russian company claims to hold first place among metasearch services on the Russian market. “AviaSales is currently the only metasearch company that controls the way the ticket price is shown to users; they demand that online agencies show the full price at first contact,” underlines iTech Capital’s PR and IR Director Viktoria Gracheva.

International expansion is a priority for Aviasales, which already works on 13 foreign markets – in the UK, Germany and Australia in particular – under the JetRadar brand. More than one billion travelers use JetRadar each year, the startup claims.

With its HQ located on the island of Phuket (Thailand), the Russian company employs about 80 staff members.

Fast growing segment, hot investment destination

The Russian travel market was worth $53 billion in 2012, according to global travel market research company PhoCusWright. Only 14% of this market is currently booked online, which is a lower rate than in the other BRIC countries – and substantially less than the over 50% rate found in the US and UK.

Online ticket sales and hotel bookings accounted for more than $7.5 billion last year, with a 40% annual growth rate, according to Russian e-commerce consultancy Data Insight.

Growth has been favored by the easing of visa requirements for Russian citizens, the growing use of bank cards, and fast e-commerce penetration – especially in Russia’s regions, as analyzed in a recent report by East-West Digital News.

Venture funds have invested heavily in Russia’s online travel market over the past few years. Among the most well-funded startups is online hotel booking agency (formerly, which raised $30 million in less than four years from Western European funds Mangrove Capital and Ventech and Russia’s VTB Capital.’s competitor Ostrovok secured more than $40 million in four rounds between 2010 and 2013 from leading US business angels and venture funds – but had to lay off a significant part of its staff last year.

Innovative air ticket booking site raised $25 million in 2012 with plans to go public on western stock markets.

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