According to co-founder Fabrice Grinda, “OLX is probably the largest classified site no one has ever heard of.” And now it’s also the most funded classified site no one has ever heard of, having secured an additional $13.5M in Series B funding today from General Catalyst, Bessemer Venture Partners, Founders Fund, and DN Capital.
The round brings OLX’s total funding up to $23.5M after raising a previously undisclosed Series A round of $10M in September 2006 with the same VCs and various angels.
Americans are not likely to have heard of OLX because its popularity lies mainly outside of the United States in places like Spain, India, Portugal, Mexico, South America, China, and the Philippines. It has established a presence in a total of 40 countries while supporting 15 languages. Much of its success in the Philippines can be attributed to its white label partnership with Friendster. Its offices are also spread over the globe with 92 employees working out of New York, Buenos Aires, Beijing, and Moscow.
The idea behind OLX, in addition to becoming Craigslist for the rest of the world, is to improve on the technology of first generation classified sites. Grinda prides OLX in its Web 2.0 features which include social network widgets, better search, Ajax-based editors, interactive maps, and mobile versions.
OLX was launched in June 2006 by Grinda with co-founder Alec Oxenford. In addition to taking on Craigslist, OLX faces off against eBay’s Kijiji, which poses the biggest international threat because it has also taken an aggressive global campaign.
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He’s right. No one has heard of it.
If craigslist were Google, OLX would be ask.com.
Everyone for online classifieds go to craigslist first, just like everyone who wants to search for something always go to Google.
lol huh? What genius created the name
OLX is short and easy to remember. It could also stand for Online Exchange. It was actually going to be the name of one of my first startups - an eBay equivalent in Europe, but the name was too close to that of a competitor so I kept it for a rainy day.
The Hater / Boring Market: You would be surprised by how few people have heard of Craigslist outside of the US. In Spain, Mexico and Argentina (to name a few), you would be much better served by going to http://www.mundoanuncio.com (one of our sites), http://www.olx.com.mx or http://www.olx.com.ar
Nice work grinda and good luck!
The big fat huge elephant in craigslist servers that no one ever talks about is the amount of spam you get every time you list or even when you reply to a spam (dressed as a listing)
I used to use Craigslist everyday, no more.. ill try OLX, i hope its not rampant with spam.
thanks!
Google bit Miscoft
OLX Raises $13.5M very much
another free job board with a warchest. it surprises me that job boards don’t seem concerned even by craigslist… but maybe the threat is still too remote. my comments on job board reactions here - http://internetinc.com/Craigsl.....81-million
Zizi: Spam/scam is a problem with all free classified site because we’re free and easy to use. The easiest way to solve it is to charge, but obviously that would defeat the purpose. We never intend to charge for listings.
We do our best to limit it through a combination of community feedback, manual review, blacklisting, etc. and are still working on our silver bullet. We have a few cards up our sleeve. Hopefully it will be much better in 6 months or so.
Fabrice
what is the revenue model — pay to list or ad views?
100% free to list. The business model is advertising. We currently monetize using Google AdSense.
It works rather well for 2 reasons:
1. Behavior: users are looking for something hence click on the ads if they are relevant.
2. Our top categories - jobs, real estate, cars, merchandise sale - have high CPMs
We will probably introduce featured listings in a few months where people will be able to promote their ads. We do not intend to ever charge to post
Craigslist will drink Olx’s milkshake
Congrats to OLX. It´s great news for a company headquartered in Palermo Valley, Argentina.
Thanks JP!
Like you may know, we are working very hard and OLX represents our entire life (or almost the 85/90%).
We are ABSOLUTELY happy with this and a lot of stuff is coming!
See you at the next PalermoValleyNight in May.
Hope everything goes well for OLX.
I do agree with you that not many people have heard of craigslist outside of the US. I live in Korea and many here haven’t heard of it.
I’m a craigslist FAN since 1999. I meet my girlfriend on CL, bought and sold many items and ended up accidently creating a photo hosing service before there were photo hosting services, needless to say “but I just did” I have watched them grow. I do wish OLX the best of luck, and they might do well where craigslist is not, but they’ll have to move fast. Recently I read that Craigslist is making north of 100 million per year http://tinyurl.com/3xbxuj , I have no Idea how true this is, but with his what is it 19 employees, and massive cash reserves and 10+ years of dealing with everything that is the online world. Craig if he wanted to could really turn it on. You don’t think so? Remember this, Craig thought of craigslist, you didn’t. For example he could partner with all newspapers, and there are a host of features that he could add. Basically over night he could double or triple. The only way to beat him is to buy him, “that’s my guess” At the end of the day, raising money to compete against a free service seems just seems crazy. And trust me, I know crazy.
WTF? It seems as though we are recycling old businesses and reselling them to the venture caps, because they are buying into any thing these days. why in the world would a software like this need 13.5m in the bank?
Some after thoughts for OLX’s success.
Fabrice, is an extremely talented individual, listen to his podcast on Greg’s site http://ventureVoice.com, I love how he took two years off after his euro/eBay company to decide on what to do next. I think he has a list of nine requirements before he’ll do a business and its very compelling. My guess on how this might all play out over the next two years. OLX will dominate the area’s where craigslist is not. Craig will either be acquired or be in the process “my guess”, the buyer is somebody huge like Merdoc or Google will just keep throwing Billions at him until he capitulates, then they’ll snap ut the other major players. OLX will return a hefty return for the investor and Fabrice can add another success to his list.
Wayne:
Don’t get me wrong. I love Craigslist. It’s fast, it’s easy to use and it just works. I found my dog keeper on Craigslist, several girlfriends, etc.
In fact, it’s because I love Craigslist so much that I decided to launch OLX. I felt there were many things missing on Craigslist: pictures on the listings page, support for embedded videos, a great mobile version, more local languages, etc. I believe we built a better site than Craigslist, but I don’t think we will ever become number 1 in the US. It’s hard to overcome the network effects they already have.
However, I do think we can be extremely successful outside the US and hopefully be somewhat relevant in the US, especially in jobs and real estate where most of our competitors charge (Craigslist included in certain cities).
I agree that if Craigslist did everything you suggested they would be formidable, but that’s not their ethos. Craig and Jim are not trying to conquer the world, they are just trying to build a site that answers their users’ requests and I fundamentally respect them for that; however, it creates an opening for a site like OLX.
why exactly do they need almost 100 employees for a basic classifieds site?
Faramarz:
Free online classified sites face two main challenges:
1. As all marketplaces, we need liquidity - enough posts to have what you are looking for and enough people who reply to make it interesting for those who post.
2. Spam/scam given that we are free and easy to use.
We need the money to address both issues.
We were launched in June 2006. We now generate over 1 million new ads per month (after removing over 500,000 spam ads) and over 200 million page views per month. We would not have gotten there had we not had the cash to advertise and buy a few companies.
Moreover, there is inherent complexity in the fact that we are in so many languages. It means we need many people to make sure we provide a great customer experience in all the countries and languages.
We could build the site with less money, but it would take a lot longer and someone else might build it first…
Andrew:
The bulk of the employees are in the customer service and scam/spam fighting department. If we were only in English we would have many fewer employees, but we need at least two employees per language and we are in 15 languages right now (we over 20 new languages planned).
Wayne: Thanks so much for the kind words! I hope you are right!
Makes sense, i guess thats the cost of internationalization. You seem to have a lot of real estate listed which doesn’t seem proportional to the other categories…I’m guessing you are tapping into the MLS or something?
Actually furthering the previous thought: I never set out to sell the companies I build. Ideally I would build a huge, successful, interesting company that provides value to its users … and I would keep running it for a very long time.
I only sell if the growth slows or the business is under threat or that maybe it fits better as part of another company … or if someone offers me today what I think it could be worth in 2 years.
Andrew:
The categories we are strong in vary dramatically by country, either because of the competitive environment or for some random reason.
In the US, we seem to do well in real estate because:
* Most competing sites charge
* Many real estate brokers have feeds they can easily send us via XML which we accept (and Craigslist does not)
We are not directly tapped into the MLS, but the brokers which post on OLX are.
It’s not surprising we don’t do well in categories like Personals in the US. Craigslist already covers the market extremely well.
In India we seem to be strong in personals because there are not many alternative dating sites. It really varies based on the market conditions.
This is dumb move by the investors. There going to loose their money. Why will you go after craigslist. How will you compete with something that is FREE. Ebay couldnt do it, Yahoo couldnt Google Couldnt. People are just like to waste money. Invest in my website.
YouYap.com
If Craigslist does a better job handling spam they’ll have a much stronger position in the market and won’t have to worry about newcomers muscling them out.
Fabrice,
good work. even though i haven’t heard of. but there is no reason other should not try if someone else doesn’t utilize their market. Good thought. and good answers here as well. good patience.
Boosting listing nubmers by NEVER deleting old crap:
Acer cs-5530 digital camera=$150
Cameras - Camera Accessories - Albany, NY -
80 weeks ago
Fabrice, you may not want to sell, but your VC might disagree.
too many spam links on the site… interesting design though.. although CL is full of spam and fake ads as well… Lots of VC money to sponsor a lot of spam. Welcome to web 2.0
what they will do 13,5 Million $???
OLX == DOA
I can appreciate Fabrice defending his baby, but let’s face it. You don’t have a chance. You have 3 times the staff of Craig, place ads that are annoying as hell in the the most annoying place on the page. Face it Craig is better and Craig makes a market in all these niches. You have no traction. Loquo dominates Spain. I predict long boring fade out to black for OLX. Wake us when it’s over.
I posted a view on OLX from an international perspective on http://blog.quintura.com
Craig open market for most of the niche but it still look traditional, I think they should make it more feature rich for professional marketers.
US classifieds market is monopolized by craigslist, it does not matter if you invest millions or billions, people are not going to use it…VCs who put money betting US market are just pushing money down the drain
May be there is a chance in international market, but it requires tons of money to market….kijiji is spending tons of money still having problems competing with local market sites…..unless it is completely new, there is no chance for craigslist replicas!!!
Congrats Fabrice!
To Alec, Fabrice, Jordi, Alexis, and the rest of the team, CONGRATULATIONS and keep on your great job. It is one of the big examples that from Argentina (Palermo Valley) we can build world wide projects.
Great news for those fed up with Craigslist. Sign me up!
What we really need is not another competitor of Craigslist but a control over the onslaught of fake online offers. I posted one ad in Craigslist and I received tons of scam emails from Nigeria.
I question this:
If I am a advertiser, and I place an ad on OLX. And OLX is placing eye-ball competing (read contextual) adsense ads besides my classifieds listing. Does this make sense for me to spend time advertising on OLX?
True, if make sense for the user as it offers options, but again the alternative options should be towards the other similiar classifieds on the site.
For the advertiser, I guess other than free, their time are spend generating pages for OLX to place more adsense boxes.
Jose:
You are absolutely right. We tried to sort search results by “Best Match” where all classified sites sort with the newest content first. Given how important fresh content is, we are going to move to newest content first in search results (as it is when you browse the regular listings.
MrCrashyCash: If we can go public they will allow me not to sell
I think OLX stands a shot - just looking at the early adopter crowd (mine being my college community and young finance/consulting analyst community) - i frequently hear complaints about Craiglist. It usually comes in three forms:
1) Craigslist is a clutter and UI-mess
2) Craigslist has tons of spam/bad worms (classic adverse selection)
3) Craigslist misses key social connectivity features (e.g., web 2.0, widgets, etc)
While there is no real viable alternative with critical mass in the U.S. today, I can see U.S. users shifting to other sites (and similar patterns happening around the world) given improvements in the above 3
Fabrice,
I am rooting for you.
To the skeptics out there - Joel and Jeremy would not be pouring more money into the business if it were not prospering.
Congratulations Fabrice! We have a couple of Argentines on our team too:)
more comments about your enterprise here: http://internetinc.com/Free-cl.....st-job-ads
Congratulations to the whole team of OLX.
I know most of their team and they kick ass! Great job guys!
Webhosting Advice: We are trying to block all ads and replies to ads from Nigeria (and Benin, etc.). We are not quite there yet, but we are working on it…
Marc:
I hear your skepticism. However, classfieds are a $100 billion a year business globally. There is room for more than one player.
Also, in Spain and Latin America we do have traction. Compare our Alexa (that of http://www.mundoanuncio.com) to that of Loquo.com…