Elbrus Capital, a leading private equity firm focusing on Russia and neighboring countries, has attracted $260 million to launch its third fund. As reported by business daily Kommersant, the firm aims to raise $600 million in total until the end 2022 for this new fund, which will focus on Russian digital companies.
The first deals are expected to take place in the first quarter of this year. Elbrus Capital Fund III will typically invest from $30 million to $100 million in each company, but does not rule out “experiments” with smaller tickets.
Among the limited partners of this fund are international finance institutions from the UAE (affiliated to Abu Dhabi’s sovereign wealth found Mubadala and ADIA) and the EU, as well as family office and private funds. Some of these LPs are investing in Elbrus Capital for the first time, the PE firm told Kommersant.
Russia’s geopolitical situation is complicated, conceded Elbrus Capital Senior Partner Dmitry Kryukov. Although international investments have been affected, tech investors are putting their attention on potential returns in Russia’s fast-growing digital space, rather than politics.
Kryukov cited the example of HeadHunter: this Russian company now trades on the NASDAQ at a valuation exceeding $1.5 billion, up from $130 million when Elbrus invested in it.
Focus on digital
Elbrus Capital funds focus on growth and buy-out investments — even though its portfolio includes some rather young startups. The investment strategy focuses on four areas: digital, including consumer and business Internet; changing consumer patterns (consumer goods and services); outsourcing and business infrastructure, including logistics; healthcare and education.
In the digital sphere, the Elbrus portfolio includes:
- Bank and insurance portal Banki.ru, in which Elbrus acquired a stake in late 2020;
- Blablacar, the French car pooling giant — which owns Busfor, a company in which Elbrus had invested in 2016;
- B2B-Center, a major online procurement marketplace;
- ChefMarket, an online meal kit delivery service in which Elbrus invested $1.3 million in 2016;
- CIAN Group, a leading real estate online database, which received a capital injection from Elbrus back in 2015 and now has plans to go public in 2022;
- HeadHunter (HH.RU), the Russian job search giant, which went public on the NASDAQ in 2019;
- PickPoint, a leading network of collection points for e-commerce orders;
- Online retailer Westwing Russia, which Elbrus acquired in 2018;
- Online appointment platform YClients, in which Elbrus invested in 2019.
Elbrus Capital Fund I (launched in 2007) amounted to $324 million, while Elbrus Capital Fund II (2014) reached $550 million. Total commitments exceeded $1 billion, according to the firm. More than 90 acquisitions have been made since 2007.
Adapted versions of this story appeared in Bne Intellinews and The Moscow Times.
