The TilTech Foundation will become the owner of 10% of the furniture manufacturer Divan.ru
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The potential of new suppliers of furniture and home goods in the absence of IKEA in Russia inspires financial investors. The TealTech funds of Vkusville founder Andrei Krivenko and his partners invested in Divan.ru with a network of salons and the Sonno brand, which plans to open stores. Developing players in this market can successfully compete with existing ones, but the growth rate of furniture sales this year will be lower than last years, experts say.
The TealTech Capital fund will become the owner of 10% of the manufacturer and seller of furniture and household goods Divan.ru, the fund told Kommersant. Under the terms of the deal, the share in Dinweb LLC, the parent structure of Divan.ru, can be increased to 25% in a year. The volume of investment is not disclosed.
The Divan.ru assortment includes sofas, armchairs, beds, textiles, garden and home office furniture, produced at our own and partner facilities. The retail network includes 65 points in Russia, stores in Belarus, Kazakhstan, and Uzbekistan. In 2023, Divan.ru’s revenue in Russia grew by 28%, to 7.8 billion rubles, and gross profit by 35%, to 4.1 billion rubles, year on year, the fund reported.
TealTech Capital is part of the TealTech group of the founder of the Vkusville chain Andrei Krivenko, co-owner of the Agama Group of Companies Yuri Alasheev and the head of the ChemRar medical center Andrei Ivashchenko. Other TealTech Capital projects include the Noun clothing brand, Doctor Fomin Clinics, and the Blue Sleep mattress manufacturer.
Divan.ru founder Anton Makarov says that the parties have known each other “for years” and the company is close to the fund’s management methodology. Investment Director of TealTech Capital Stanislav Novikov said that the fund has been looking at the furniture and home goods market for a long time, seeing a shortage of quality products after IKEA left Russia. The fund believes that Divan.ru can reach revenues of 50 billion rubles in five to seven years. In 2024, Divan.ru plans to increase production and launch new categories of household goods, the fund says. Managing Director of Peregrine Capital Dmitry Gabyshev believes that the size of the fund’s share depends on the fulfillment of forecast indicators; if not met, the share may be recalculated upward.
The share in Divan.ru is not the only new investment of TilTech funds on the market. The 3Stream fund, part of the group, will invest 100 million rubles this year. into the Sonno brand of Konstantin Sobolkov and Vadim Smirnov, under which blankets, pillows, bed linen, and home fragrances are produced. The funds will be used to expand the range to 2.5 thousand items and open three stores in Moscow, says a Sonno representative.
General Director of the First Furniture Factory and President of the Association of Furniture and Woodworking Industry Enterprises (AMDPR) Alexander Shestakov notes that the Russian furniture market is saturated, and increasing market share is only possible at the expense of competitors. Managing partner of Vanchugov and Partners (among the facilities is the Design Center in Rumyantsevo) Alexey Vanchugov points out that the demand for furniture and household goods continues and this is a large market where there are enough conservative players with whom you can compete due to a modern assortment, quality of service, logistics, etc. Focus Technologies notes that Russians take a balanced approach to purchases. In January 2024, the Mall Index (the number of visitors per 1 thousand sq. m of space) in Moscow shopping centers was comparable to the level of January 2023, and in St. Petersburg increased by 4% year on year.
According to AMDPR estimates, at the end of 2023, furniture production in Russia increased in physical terms by 33% year-on-year, to 66.7 million units, and market turnover increased by 23%, to 438 billion rubles. Participants explain the dynamics by the restoration of demand for such products due to the increase in the commissioning of new residential buildings (see “Kommersant” dated December 26, 2023). But, as Alexander Shestakov notes, the growth rate of furniture sales slowed down already in the fourth quarter of 2023 and one should not expect the same dynamics this year. According to him, the main risks are borne by the tightening of conditions for preferential mortgage programs, since the demand for furniture for new buildings acts as a market driver.
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