Moscow and Silicon Valley-based Almaz Capital Russia Fund I, which is sponsored by Cisco, UFG and EBRD, has invested about $3 million for a 23% stake in the leading Eastern European casual games company, Alawar Entertainment. The 15% stake was purchased from Finam Capital Partners and the other 8% was purchased from business angel investor, Elcomsoft President, Alexander Katalov. This is the 2nd venture capital investment in Russian online games company over the past month after Mangrove Capital and ABRT Fund invested in Drimmi.
Finam invested about $1 million in Alawar in several stages in 2007. The valuation of Alawar increased several times to more than $12 million since that time, reported Vedomosti. Alexey Basov, Director of IT Investments at Finam and CEO at Begun, negotiated Finam‘s investment and exit from Alawar.
Founded in 1999 by Alexander Lyskovsky and Sergey Zanin, Alawar Entertainment specializes in the development, publication and distribution of casual games. It is based in Novosibirsk, Russia with five development studios in different cities. Alawar distributes games to audiences in 60 countries worldwide through its own web-sites and online portals as well as offers a ‘white label’ solution for web-site owners to launch their own casual games sections. In 2009, the Russian casual games market was valued at more than $30 million. Alawar holds some 70% of the Russian market. More than a half of Alawar revenues come from USA and Europe.
Alawar published 24 casual games for PC last year, including Farm Frenzy 3, Vampire Saga: Pandora’s Box and The Treasures of Montezuma 2. The company also released 8 games for iPhone, 2 games for PlayStation 3 and several games for Android & Ovi platforms. In 2010, Alawar plans to enter the social games and MMO markets as well as expand onto other platforms.
Almaz Capital Russia Fund I previously invested in web-based ERP and financial software company Acumatica, mobile social network provider Apollo Project, virtualization and automatization software vendor Parallels, and search engine Yandex. The fund is managed by Almaz Capital Partners.