Prosus Divests from Russian Platform Avito After Polish Pressure

March 28, 2022
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The international classifieds operator Prosus has announced that it will divest from its Russian general classifieds platform Avito following pressure to do so from users and staff of its OLX Poland business.

Prosus released a short statement late on Friday saying:

"We can confirm OLX Group has taken a decision to cease all involvement in its Russian operations. The separation process is underway which will decouple the companies into two independent entities. Avito will operate as an independent Russian entity run by a local management team, and governed by its own Board of Directors.

Prosus will have no day-to-day involvement in the operations of the business and will neither invest further nor seek to benefit economically from the interest in Avito in these circumstances."

The legal work involved in separating the two companies is likely to take some months and Prosus is certain to feel the effects of the loss on its balance sheet. Avito is the clear leader in the Russian online classifieds industry and generated 31 billion Roubles in revenue at a trading profit margin of 41% in 2021.

The divestment comes after Prosus' business in Poland was criticised by users and staff alike for its links to Avito. Users of OLX Poland were leaving the platform in droves last week after news emerged that the platform was connected, through Prosus, to Avito which has been used to post job listings for the Russian army and intelligence services.

The latest news represents a stark 180 turn from Prosus and its CEO Bob Van Dijk who had told investors that the company would continue to run its operations in Russia on the 7th of March.

"we employ in Avito 4,000 people who are our people. And they depend for their livelihoods on the business that we run, and the business benefits ordinary Russians. So for us to rush out and leave those people without their livelihoods in the short term feels like the absolute wrong thing to do"

 

In other news related to the online classifieds sector in Russia, both Avito and leading specialist real estate vertical Cian have both launched or enhanced their short-term rentals products with Airbnb and other international players having exited Russia at the start of the war.

 

March 28, 2022
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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