By Alexander Marrow
MOSCOW (Reuters) - A $250 million funding round has given Russian streaming service IVI more flexibility over a possible IPO, met its mid-term financing needs and supports its high growth targets, its chief executive Oleg Tumanov told Reuters.
Russia's answer to Netflix and its major local player, which competes with Sberbank's Okko and Yandex's Kinopoisk, this week raised funds from existing and new investors, including state-run bank VTB.
For five to six years IVI's annual growth rate has been 50% on average, Tumanov said. In March, IVI reported a 44% rise in 2020 revenue to 8.8 billion roubles ($119 million) and a monthly audience of 59.5 million unique users.
"You need investment to achieve high growth. $250 million to support our growth is enough for us to execute our ambitious investment programme," Tumanov said.
IVI's four largest investors, of almost 15 in total, will have more than 51% of the share capital and include VTB. More than 30% of the funding was taken up by existing shareholders.
The funds will primarily be spent on expanding IVI's content offering, with content creation making up 25-30% of that over the next three years, and the majority of content spend on licensing, Tumanov said. Technology and marketing initiatives will also receive a funding boost.
The CEO said an IPO remained a strategic option, both for funding and also to gain liquidity for shareholders, adding: "We are more flexible as to when and where we can do it."
IVI had picked banks to arrange its initial public offering in the United States, Reuters reported in November, but plans were put on ice after draft legislation proposed limiting foreign holdings in Russian online streaming services to 20%.
The draft law was withdrawn after opposition from industry players and will now likely affect the management of these services, rather than their ownership, Kommersant reported last month.
($1 = 73.6900 roubles)
(Editing by Alexander Smith)