From Russia With Money: How KupiVIP Is Riding The Middle Class Wave

From a slow start in the aftermath of the Soviet Union, Russia is now Europe?s biggest internet market with 53 million users (compared to number-two Germany at 51 million), and figures from GP Bullhound and comScore indicate that it is also growing the fastest, at 14 percent (other European countries are at less than six percent it says). On top of that, a growing base of middle class consumers -- 15 million today, expected to double to 30 million in the next five years in an e-commerce market that is projected to be worth $40 billion -- has translated into a veritable boom in the rise of tech companies. But not all of that growth means big money just yet. KupiVIP, the Russian flash-sales site, is on track to make $200 million in net sales this year, on revenues of $300 million. Oskar Hartmann (pictured), KupiVIP's young and bullish CEO and co-founder, who I met while on a tour of Moscow's tech scene this week, believes the company will be making $1 billion in sales annually within the next five years -- pretty modest by the standards of Amazon, a company to which KupiVIP is compared, which had revenues of over $48 billion in 2011, but still making KupiVIP one to watch in the years ahead as it gears up for an IPO, possibly in the next two years. A story that Hartmann tells gives an insight into some of the trials and tribulations of building a startup in a country like Russia:

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