International VC consortium injects $7 million into Russian package tour online reseller OnlineTours.ru
On Thursday Russia’s hot online travel market saw its third major venture funding operation in one month as OnlineTours, a reseller of package tours, closed a $7 million Series B round. The funds were brought in by a VC consortium that includes international funds e.ventures, Global Founders Capital and Holtzbrinck Ventures as well as Russia’s InVenture Partners.
The latter, a $100 millon fund launched in 2012, already invested $2 million in OnlineTours in a Series A round that took place a few months after the startup’s inception that same year.
The new capital injection is meant to increase the market share of OnlineTours and further develop its technology platform. The startup claims that its ambition is “to build the leading online travel service in Russia.”
“Not only have we received a substantial cash infusion, but now we can also tap into the deep travel experience of our investors,” stated OnlineTours CEO Matvey German, citing Holtzbrinck Ventures – whose partner Christian Saller previously managed KAYAK’s activities in Europe – as well as e.ventures and Global Founders Capital.
Hot VCs on a hot market
The market in Russia for package tours was estimated last year at $15 billion – with just 2% generated online.
According to the government agency Rostourism, Russians travelled abroad 47.8 million times in 2012, including 15 million times for touristic purposes, with Egypt and Turkey being the most popular destinations. The average price for package tours reached $1,800-$2,000.
But competition is fierce. Not only does OnlineTours compete with offline travel agencies, which are ubiquitous in Russia, but online tour offers have also developed dramatically over the past few years.
Last month, in another segment, Ostrovok.ru, a major online hotel reservation service, secured $12 million from Russian investors, coming in addition to the $38 million it had raised in previous years.