Elbrus Capital, a leading private equity firm focusing on Russia and neighbouring countries, has attracted $260mn to launch its third fund. As reported by business daily Kommersant, the firm aims to raise $600mn in total by the end 2022 for this new fund, which will focus on Russian digital companies, reports East-West Digital News (EWDN).

The first deals are expected to take place in the first quarter of this year. Elbrus Capital Fund III will typically invest from $30mn to $100mn in each company, but does not rule out “experiments” with smaller tickets. 

Among the limited partners of this fund are international finance institutions from the UAE (affiliated to Abu Dhabi’s sovereign wealth found Mubadala and ADIA) and the EU, as well as family office and private funds. Some of these LPs are investing in Elbrus Capital for the first time, the PE firm told Kommersant.

Russia’s geopolitical situation is complicated, conceded Elbrus Capital senior partner Dmitry Kryukov. Although international investments have been affected, tech investors are devoting their attention to potential returns in Russia’s fast-growing digital space, rather than politics.

Kryukov cited the example of HeadHunter: this Russian company now trades on the NASDAQ at a valuation exceeding $1.5bn, up from $130mn when Elbrus invested in it. 

Focus on digital

Elbrus Capital funds focus on growth and buy-out investments – even though its portfolio includes some rather young startups. The investment strategy focuses on four areas: digital, including consumer and business internet; changing consumer patterns (consumer goods and services); outsourcing and business infrastructure, including logistics; and healthcare and education.

In the digital sphere, the Elbrus portfolio includes:

• Bank and insurance portal Banki.ru, in which Elbrus acquired a stake in late 2020;
• Blablacar, the French car pooling giant, which owns Busfor, a company in which Elbrus invested in 2016;
• B2B-Center, a major online procurement marketplace;
• ChefMarket, an online meal kit delivery service in which Elbrus invested $1.3mn in 2016;
• CIAN Group, a leading real estate online database, which received a capital injection from Elbrus back in 2015 and now has plans to go public in 2022;
• HeadHunter (HH.RU), the Russian job search giant, which went public on the NASDAQ in 2019;
• PickPoint, a leading network of collection points for e-commerce orders;
• Online retailer Westwing Russia, which Elbrus acquired in 2018;
• Online appointment platform YClients, in which Elbrus invested in 2019.

Elbrus Capital Fund I (launched in 2007) amounted to $324mn, while Elbrus Capital Fund II (2014) reached $550mn. Total commitments exceeded $1bn, according to the firm. More than 90 acquisitions have been made since 2007. 

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This article first appeared in East-West Digital News, a partner of bne IntelliNews