Since our research report published in May 2011, Russian internet has continued to develop at an impressive pace and we have continued to actively support local champions, as evidenced by our recent US$75m private placement for Avito, the largest private placement in the European internet sector this year so far. Indeed, the Russian internet audience has overtaken Germany’s to be the largest in Europe. Online advertising now represents US$1.4bn, larger than that of Spain. Potential remains immense, with internet penetration in regions still c.15% behind that of Moscow and St. Petersburg. In the past 12 months, digital advertising has surpassed print, and more exciting companies have “leapfrogged” Western models to offer innovative solutions adapted to local idiosyncrasies. Finally, the investment environment has developed further with more funds willing to place bets on Russian internet, and local venture funds now also investing abroad.