The partial floatation of part of Mail.ru Group in London this month appears to have warmed up the market for Russian digital IPOs.
Badoo, a social network that lets users pay to make themselves more prominent to peers, is “preparing to enter the stock market”, says Forbes’ Russian website (and Quintura), citing unnamed people close to founder Andrei Andreyev. The site has not yet responded to our calls or emails.
Twenty-percent stakeholder investor Finam tells Forbes it was not aware of such a plan, but that Badoo would be a good IPO candidate. “Those who know Andrew, it’s clear that he wouldn’t agree with a (raise of) less than $1 billion,” Finam founder Victor Remsha says.
So what is Badoo? Headquartered in London but originating in Russia, it was launched at the height of the social networking boom of 2006, and off the back of Andreyev’s previous dating site Mamba, with an emphasis on connecting members with new people, rather than an existing social circle. It’s like Faceparty, only cleaner.
Despite being based in London and being internationalist, with 10 global offices, Badoo has had difficulty popularising in many territories. It now claims 80 million users and is most popular in France, Spain, Portgual and Latin America.
But a fifth of users pay at least one euro each month to raise their profile to peers, Badoo has been adding other pay features like virtual gifts and is estimated to be on course for $200 million in annual revenue, Forbes reports, again without confirmation.
Either the IPO market is warming up, or certain folk are trying to warm up Badoo’s reputation. Finam is also a shareholder in Mamba and in contextual ad net Begun, which Andreyev also founded. Maybe someone is putting Badoo in the shop window for attention from Mail.ru Group, which has, of course, just raised a big warchest for buying up more Russian digital companies and already has considerable social network assets. Indeed, Mail.ru already owns part of Mamba.
Finam invested 750 million rubles for a 10 percent stake in January 2008 – a deal Forbes reports valued Badoo at $300 million – and has since invested further to bring its stake to 20 percent.
Updated (Nov 15): Badoo finally responded with: “Badoo is not considering an IPO, but may in the future, we are growing very fast globally and now have over 83 million registered users.” As I suspected, someone is pumping folk for an IPO that Badoo clearly is contemplating.