Chinese Internet giant invests in CDNvideo - the Russian operator of Internet Content Delivery Networks

Chinese Internet giant invests in CDNvideo - the Russian operator of Internet Content Delivery Networks

Wangsu Science & Technology Co Ltd (brands — ChinaNetCenter and Quantil) and the resident of the IT cluster of the Skolkovo Foundation CDNvideo announced signing of a purchase agreement, according to which the Chinese Internet giant acquires a controlling stake in the leading CDN-provider in Russia and CIS, the leader in the segment of video content transmission on the Internet. The amount of the transaction was not disclosed.

Shares in CDNvideo were sold by Venture Fund Leader-Innovations, created with the participation of RVC capital and placed under trust management of CJSC Leader, as well as private investors of the early project stage. Yaroslav Gorodetsky (CEO) and Sergey Ivlenkov (CTO) keep managing the company and developing the business in partnership with a new strategic investor as shareholders and operational managers.

Yaroslav Gorodetsky, founder of CDNvideo:

"This is the first time on the Russian market, when a domestic technology company is becoming attractive to acquisition by a Chinese strategist. CDNvideo receives an excellent opportunity to offer the technologies developed in Russia to the group of companies ChinaNetCenter, which operates not only on the China’s huge market, but also worldwide, and is the second largest company in the global CDN industry in terms of market capitalization. The merger with ChinaNetCenter will give a significant synergistic effect and allow us to invest more in development and expansion of the range of products and services offered to Russian customers."

Kevin Liu, Director of M & A ChinaNetCenter:

"We are optimistic about the potential of the Russian Internet market, as well as growth of consumed Internet content traffic in the future. CDNvideo is an excellent content delivery service provider (CDN) with an excellent team, advanced technologies, products and service. We believe that integrating the experience of ChinaNetCener and CDNvideo will help the company achieve rapid growth on the markets of Russia and CIS countries and contribute to the development of the Internet industry."

Igor Bogachev, Vice-President, Executive Director of the IT-cluster of Skolkovo Foundation:

"CDNvideo is a vivid example of a well-balanced team in which scientific expertise is correctly combined with commercial. On the one hand, the company has developed unique algorithms that ensure high competitiveness of its solutions in the field of content delivery networks. On the other hand, the team is successfully engaged in the commercialisation of its decisions, including participation in events, business meetings and foreign business missions organized by Skolkovo Foundation.

Konstantin Nadenenko, Director for Venture Capital Investments at Leader, CJSC:

"For us, investments turned out to be unexpectedly short in terms of the time of stay of the company participants. We are deeply convinced that the potential of the company’s value growth is far not exhausted, but we found the strategist’s proposal interesting for our investors, the return on investment acceptable and therefore decided to increase the liquidity of the Fund. The experience of communication with colleagues from China deserves special mention and respect. We hope that there will be more high-tech deals with partners from China in our country. And, especially, we express our gratitude to our colleagues from VTB Capital, in particular to Dmitry Dorozhevts, for their high professionalism as consultants during the transaction."

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