Oktogo

» see oktogo.ru as it lived, on the wayback machine

~ the obituary ~

Oktogo started taking hotel bookings in the second half of 2010, run by Marina Kolesnik out of a company registered in St Petersburg. The pitch was the ordinary one for that year. Russians were beginning to book travel online instead of through a travel agent, and somebody was going to own the Russian-language layer of that market.

Two companies went at it hard. Ostrovok raised 13.6 million dollars in July 2011 from General Catalyst and Accel, the second largest deal in Russian online travel at the time. Oktogo went the other direction and raised from Russian institutions, including ten million dollars from VTB Capital for thirty percent of the company in 2012 and eleven million from the Victor Sazhin Group. By 2013 it was carrying a forty million dollar valuation on twenty six million dollars of total investment.

It never reached the top three. Russian analysts put it inside the top ten of the country's booking services and no higher, which for a business running on volume and thin margins is an expensive place to sit with that much money already spent.

~ the case file ~

~ the fund that stopped ~

MCI, a Polish investment fund, came in during 2015 and became the main shareholder. Kolesnik later dated the start of the trouble to exactly that arrival. In early 2016 the fund decided it would not invest further and would look for a buyer instead, which for a company spending on customer acquisition every month amounts to a countdown.

Nobody bought it. In January 2017 Kolesnik sent a letter to employees warning that the company might have to be liquidated because of its financial position, and the Russian business press had it within days.

~ the hotels ~

By 28 February 2017 the site would not load and nobody was answering the phones. The social accounts had stopped updating some time before that.

Hotels that had accepted bookings through Oktogo were owed payment, hundreds of them according to the reporting at the time, and travelers who had already paid for rooms found out at reception. Seventeen lawsuits were filed against the company between the start of January and the end of February 2017. The investors lost money on paper and the hotels lost money they had already earned.

~ the competitor that lived ~

Ostrovok is still running and still Russian-owned, and after Booking.com left the market in March 2022 it became one of the few ways to book an international hotel from inside Russia at all. The gap Oktogo spent twenty six million dollars trying to fill got filled by the competitor that had taken foreign money instead of domestic money, which is not the lesson anybody expected to carry out of 2011.

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