The Ukrainain Internet store Topmall.ua, has agreed a media-for-equity transaction with broadcasting group company StarLightMedia, which is part of the EastOne group. According to the parties to the agreement, this represents the first such deal in the Ukrainian market.
The essence of the deal is that StarLightMedia will provide Topmall.ua with concessional TV advertising on its sites valued at $3.2 million. In exchange, the media-holding firm will receive equity in the startup. The size of the share has not been disclosed. The deal is due to be closed by the end of next month.
The broadcasting group consists of six popular television channels — STB, ICTV, Novyi Kanal, M1, M2, and QTV. StarLightMedia is committed to not only selling airtime, but also in developing the online platform’s marketing strategy, without interfering with other operation management activities, notes The Kyiv Post.
According to Viktoriya Tigipko, the managing director of TA Venture and head of the board of directors at Topmall.ua, the project is steadily growing, with sales increasing at a monthly rate of 30-40%. Thanks to the deal, the store intends to boost brand awareness and sales.
Tigipko also said that her fund already has a few similar contracts signed for its portfolio companies in Europe. “It’s very important to launch this process in Ukraine,” she told the Kyiv Post. “When there’s no cold cash (on the market), we can consider any alternative funding sources.”
TA Venture launched Topmall in spring 2013 with the stated goal of creating the leading Ukrainian fashion e-commerce company, as reported by the local edition of Forbes magazine. At that time, TA announced that it will invest no less than invested $5 million in the project. The fund’s representatives could not be reached for further comments.
EastOne Group was founded by Ukrainian billionaire Viktor Pinchuk.