East-West Digital News 18 June 2012
In yet another step in its international expansion, Ru-Net, a major Russian venture fund, has invested $17 million in Freecultr.com and BeStylish.com, two Indian e-commerce companies.
The news on the investment in Freecultr – a website that offers its own apparels brands – was initially reported earlier this month by Iamwire, an online publication dedicated to the Indian Internet and mobile markets.
“With its high burn rate and very low revenue, certainly Freecultr – which initially raised $4 million from Sequoia and a very small contribution from its original promoter – needed a lot of cash and soon,” Iamwire wrote.
An unnamed “source close to the deal” told Russian business daily Kommersant quite the opposite: Freecultr, a highly profitable company whose monthly turnover grew three-fold over the last three months, was interested in Ru-Net’s e-commerce expertise rather than actually needing Ru-Net’s money, that source asserted.
Kommersant reported that Freecultr’s round of financing totaled $9 million – of which Ru-Net brought $7 million and Sequoia $2 million – based on a $18 million valuation.