Ostrovok, which offers a choice of 135,000 hotels in 200 countries, plans to use the proceeds for expansion, product development and increasing its sales force, the Moscow-based company said in a statement today.
The Russian travel market was worth $48.6 billion in 2011, of which just 10 percent came from online services, according to researcher PhoCusWright. Ostrovok competes with Priceline.com Inc.’s (PCLN:US) booking.com and local rivals including oktogo.ru and iglobe.ru.
“Hotel booking is the largest and most profitable segment of online travel,” Ostrovok co-founder Serge Faguet said by phone. “In Russia, where online-travel is under-penetrated, this segment may grow fivefold within five years.”
Online agencies can earn 15 percent to 22 percent commission selling hotel bookings and a 4 percent to 5 percent fee on airline tickets, Faguet said. He and partner Kirill Makharinsky, both born in Russia, founded Ostrovok in 2010 after working in Silicon Valley.
Ostrovok has more than 1 million monthly unique visitors, and has increased revenue more than 10-fold in the last 12 months, Faguet said, declining to disclose precise numbers.
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