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Op-Ed: Lofty investments may drive classified startups past Craigslist

The digital world today has brought almost everything online, ranging from education to entertainment. With nearly everyone taking their product and service needs to some capacity online, classified sites still successfully bridge the quickly closing gap between buyers and sellers — although sometimes the end result isn’t desirable.

Craigslist and eBay seem to be dominating the classified ad scene as they have for years now. Their immense success has encouraged a bevy of online classified startups in various countries now who are even closer to toppling the previously mentioned online classified giants. How? Well, it’s all courtesy the lofty investments from confident investors and hedge fund managers hungry for colossal returns.

Over $200 million invested in US classified ads startups

Beginning in late 2014, classified ads startups in USA such as Letgo, Wallapop & Local5 have raised well over $200 million in seed capital to fight classified giants Backpage and Craigslist. Online classified ads newbies in many other countries also depict a somewhat similar picture. So, how much investor biggies are actually confident about these startups? Apparently enough to fund a digital battle they’re unsure can be won.

The Letgo example

Let’s take the example of Letgo, a classified mobile app that allows users to buy and sell different items locally. Within a few months of its launch in early quarter of 2015, Letgo had witnessed more than 2 million downloads which immediately proves its enormous potential in the market. In September last year, Letgo announced of accumulating a whopping $100 million USD from South Africa tech investor & media giant Naspers Limited. Naspers even has equity in rather sizable tech endeavors & classified platforms such as Flipkart in India, Tencent in China, in Russia & the very popular OLX.

The Quikr route

Undoubtedly India’s biggest classified ads portal, Quikr, also seems to have attracted top investors from around the world. It has brought in a huge 150 million USD from major returning investors such as Tiger Global, investment AB Kinnevik & Steadview Capital. Quikr’s latest round of fundraising shows a jaw dropping 350 million USD that it has planned to deploy in the development of mobile business & expansion of most active sections like real estate, cars, jobs & services. It boasts 30 million users (monthly) across 1,000 Indian cities.

OLX, 2dehands & Avito

While OLX has gathered $250 million, 2dehands has been bought by eBay by 48 million Euros. It seems Letgo was not the only classified ad startup that Naspers had faith on. In fact, earlier in 2013, the South African biggie even announced to conjoin its couple of Russian classified sites ( & with Russian classified newbie Avito under a contract worth 570 million USD. The deal held a phenomenal significance no doubt as it upheld Avito as the 3rd largest classified site in the world, just after Craigslist & (China). Naspers also decided to invest 50 million USD in cash for Avito which offered the former 18.6 % share in the classified site. The other investors who showed confidence in Avito were Kinnevik Investments, Vostok Nafta & Northzone Ventures. Avito’s increasing growth is accredited toward improved internet acceleration in areas outside the main cities of Moscow & St. Petersburg. It’s the easy availability of solid retail services in these regions that have helped in the huge growth of Avito today.


It’s again a mobile classified ad app developed by Chinese physicist Lucas Lu and was rolled into American market initially last year. Accelerating a prompt avenue for folks to list & buy different items locally, 5miles has been able to raise a handsome $30 million U.S. — which enabled it to beat the biggie called Craigslist with élan. In its latest round of funding, the firm has accumulated more than 50 million USD and presently boasts a valuation of more than $300 million U.S. It shows more than 5 million downloads, 30,000 downloads a day across iOS and Android as well as around 2 million much active users.

The mobile factor

How come these startups are encouraging jaw-dropping investments from esteemed business giants so much so that they are almost in the position to beat the elite classified ad honchos? Mobility, of course, would be the mitigating factor in many investors’ decisions.

Smartphones are governing the digital world today with almost 70 percent of online users inclined to these small-sized mobile devices for online browsing. These startup founders were quick to realize this and came up with a mobile-friendly version with their initial launch. Gone are the days when people used to launch a desktop version first and then a mobile version- it’s the reverse order that’s gaining ground today. With a mobile classified app, it takes seconds to download and just a few taps to reach out to buyers or sellers. This streamlined process initiated by these startups relieves the users from all the hassles of an elaborate desktop operation.

LA based startup, which has come up as a search engine for all the classified sites running all across the world, is yet another burgeoning startup vying for greatness. So, whether, you are looking for used cars from Quikr in India and your friend is in quest of a good quality second hand laptop in USA from Letgo, Adswish would the search avenue for you both. It’s been dubbed the ‘Trivago of classified ad sites’.

Don’t count the small guys out yet, Craigslist.

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