Ukrainian groceries delivery service Zakaz.ua has raised $2.5 million from Chernovetskyi Investment Group, founded by former Kyiv Mayor Leonid Chernovetskyi, who led Ukraine's capital city from 2006-2012.
The money, which bought Chernovetskyi’s group a minority stake in the company, will be used for further development of the service, as well as expansion to new markets both in Ukraine and abroad.
Zakaz.ua offers delivery of groceries from several supermarkets in Kyiv for Hr 35, or $3. Furshet, Karavan, Metro and Novus have thus become available for online shopping. In 2013, the service expanded its operations to Luhansk, Donetsk and Sevastopol. However, these operations had to be halted due to Russia’s annexation of Crimea and the Russian-backed war in eastern Ukraine.
The web service plans on entering new markets, such as other major Ukrainian cities and emerging economies like Brazil, India and Malaysia. Enlarging the Kyiv-based clientele is also part of the strategy.
The company’s founder Yegor Anchiskin, who also co-founded a facial recognition startup Viewdle bought by Google in 2012 for estimated $30 million, wants to “make the service convenient for half a million households in Kyiv,” AIN.ua reported. Speed and price of delivery and new partnerships with supermarkets are the Zakaz.ua’s further development frontier.
Following all the price changes, as well as checking the availability of the products, are major technological challenges for the service, admits Anchishkin.
“Just imagine: I’ve come up and taken the three remaining cans of yogurt from the shelf, but they’re in my basket and the supermarket doesn’t know (that I plan to buy them). At this very moment, our collector arrives and tries to get two cans, but they’ve already been taken,” Anchishkin said in an interview. “That’s why the whole big module in our system is devoted to forecasting the availability of certain goods based on statistics and our data.”
The investment from Chernovetskyi is the third funding round that Zakaz.ua has raised since its launch in 2010. Investors include Yevgeniya Dubynska, owner of Best Business Group, and Internet Invest Group owned by Oleksandr Olshansky who currently runs for parliament. According to Forbes.ua, the sum of investments before the current round totaled at less than $1 million.
For Chernovetskyi Investment Group, the deal with Zakaz.ua is the first significant publicly reported money placement in the tech sector. The group was founded in 2012 and has $750 million under management coming mostly from the ex-mayor’s sale of his Pravex Bank to Italy’s Intesa Sanpaolo in 2008.
“CIG does not follow a goal of obtaining the full control over the projects which attract interest,” reads the fund’s note on investment strategy.
Acquiring the minority stakes is seen as good investments by the local venture capital managers who aim at keeping the tech startups’ founders as majority owners operating the companies.
“Ukraine’s venture market is demonstrating its potential to become a powerful engine of the country’s economy,” says the group’s statement published on its official social media account. However, local venture funds rarely manage more than $50 million as investment capacities.
Earlier in 2014, the group’s business incubator CIG Digital paid an undisclosed amount for majority stakes in its alumni startups Eda.ua and Doc.ua.
Andrii Degeler is the Kyiv Post’s information technology reporting fellow. Degeler has been covering the IT business in Ukraine and internationally since 2009. His fellowship is sponsored by AVentures Capital, Ciklum, FISON and SoftServe. He can be reached on Twitter (@shlema) or [email protected].
