Russian Online Retailer Ozon Group Prepares American IPO
Offering could value company at $3 billion to $5 billion, as the coronavirus boosts e-commerce platforms by spurring more people to shop online
Ozon Group, one of Russia’s biggest online retailers, is preparing for an initial public offering of stock in the U.S. later this year or beginning of next, according to people familiar with the company’s plans, as the pandemic has boosted e-commerce platforms by spurring more people to shop online.
Ozon, which began in 1998 as an online bookstore and is often called Russia’s Amazon, could be valued at $3 billion to $5 billion, the people said. Ozon has confidentially filed paperwork with the Securities and Exchange Commission for the IPO, the people said. Goldman Sachs Group Inc. and Morgan Stanley have been chosen as the global coordinators of the possible listing.
The retailer would be the first Russian IPO in the U.S. since Russian online job search portal HeadHunter listed shares on Nasdaq in May 2019.
Ozon is jockeying against competitors, including Russian internet giant Yandex NV, as more Russian consumers shift to online commerce from bricks-and-mortar shopping. Ozon had nearly 200% sales growth in the second quarter as Russians boosted online purchases of everyday products like foods and household items.
Even before the pandemic, the Russian e-commerce has grown fast. With over 100 million users, Russia has Europe’s largest internet market by users. The Russian e-commerce market grew 23% last year to $31 billion, on par with India’s and slightly larger than Canada’s, according to Russian research agency Data Insight. Analysts expect even faster growth this year due to the boost in demand from the coronavirus pandemic.
The sector’s growth has spread from Moscow to the country’s vast hinterland, with regions outside the capital recording more than 55% of total Ozon sales. Sales in the Siberian city of Novosibirsk grew by nearly 300% in the second quarter, according to the company’s results.
Earlier this year, Ozon raised $150 million in funding to expand its distribution footprint and speed up deliveries.
The funding round was led by Ozon’s major shareholders: funds advised by Moscow-based private-equity firm Baring Vostok Capital Partners and Moscow-based conglomerate Sistema PJSFC. San Francisco-based venture-capital firm Princeville Capital participated in the round as a new investor.
Within the next several years, Ozon plans to spend more than $300 million on logistics, add roughly 2.7 million square feet of distribution space across Russia and open at least five fulfillment hubs, the company has said.