Excl: Russian venture firm ru-Net invests in e-tailers BeStylish, Freecultr

ru-Net Holdings, one of the largest Internet and technology investors in Russia, has entered the Indian market by acquiring stake into two e-commerce ventures, according to sources familiar with the development. The firm has invested in Freecultr, an e-com venture offering its own apparels brand online, and BeStylish, an e-tailer selling shoes and accessories. Both companies are backed by the Smile Group, which also runs a slew of other e-commerce sites.

Founded by Russian billionaire Leonid Boguslavsky, ru-Net was one of the first investors in Russian search engine Yandex. The firm now has expanded aggressively across the globe and made foray into US and the South-east Asian markets over the past 1-2 years.

The Moscow-based firm is making its India debut by investing in the second round of funding for Freecultr, along with the existing backer Sequoia Capital India. It has also closed a separate transaction to invest in StyleGenie Digital Pvt Ltd, which runs BeStylish.

For more details on the quantum of funding by ru-Net and the venture funding landscape in Indian e-commerce, check here.

Although the Smile Group officials confirmed the investment, e-mail queries sent to the spokespersons of ru-Net did not elicit a response. We got in touch with Sandeep Singh, co-founder of Freecultr, who declined to comment on the development. When we contacted Shailen Amin, CEO and co-founder of BeStylish, he also refused to comment. An e-mail message sent to Sequoia Capital India's Shailendra Singh was not answered till the time of writing this article.

Earlier, ru-Net said that it would be looking to invest $50 million in South-east Asia over the next two or three years. According to this article dated February 4, 2012, ru-Net had already invested in a Vietnam e-commerce platform and would be looking to invest in India as well. The firm may invest around $5-20 million in startups operating across online travel, e-commerce, entertainment and social gaming space. It has also expanded into the US by setting up RTP Ventures, which has offices in New York and Boston.

Boguslavsky's ru-Net was one of the early investors in Yandex, which debuted on NASDAQ last year with a valuation of $11.2 billion, and has revenues of over $20 billion in 2011. It also holds investments in OZON.ru (Russia's Amazon), BigLion (Russia's largest daily deals site) and ivi.ru (an online video site).