Wikimart

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

~ the eulogy ~

Every mid-size internet market got one of these. Somebody came back from an American university with the marketplace idea, raised foreign money on the argument that their country was five years behind and closing, and set out to be the local Amazon before the actual Amazon noticed. Turkey had that story too, and ours mostly ended in an acquisition rather than a locked office. That is the difference worth noticing here, and it is not about the founders.

Wikimart was founded in 2008 by Kamil Kurmakayev and Maxim Faldin, who had met while studying at Stanford. It started as a price comparison layer over other people's shops and turned into a marketplace of its own in September 2011, eventually listing something like two million products from sellers that included Ozon, Lamoda, Detsky Mir and Citilink.

The growth was real and it was fast. A hundred thousand dollars of revenue in December 2009 became two and a half million a year later, while daily visitors went from five thousand in mid-2009 to two hundred thousand by March 2012. Revenue reached ninety million dollars in 2011 and a hundred and thirty million in 2013, on a staff of around four hundred people.

~ the dossier ~

~ the money ~

Tiger Global put roughly thirty million dollars into Wikimart across 2009 to 2012, which at the time was the signal that a Russian internet company had been validated by the people who validated things. The angel list around it was the kind that gets printed in profiles, with Jeff Fluhr of StubHub and Chamath Palihapitiya out of Facebook both in the cap table.

Then in 2014 the shape of the cap table changed. Anatoly Goncharov, the owner of Finprombank, put in about forty million dollars and took control. A marketplace whose majority shareholder is a mid-tier bank is a stable arrangement exactly as long as the bank is. Faldin's later account of the period, given at length after the fact, was that professional managers installed on someone else's money spent twenty months dismantling what had been built.

~ the unraveling ~

The suppliers noticed first. Lawsuits started arriving in 2014 and never stopped, and by the end of 2015 the debt owed to sellers was around six hundred million rubles while accumulated losses ran to 1.1 billion. Management said in mid-2016 that supplier debt was down to thirty million, which was either a genuine recovery or an accounting position depending on who you asked at the time.

The answer came that autumn, when Finprombank was stripped of its license. The bank was the funding, and when the license went the money went with it. Wages stopped being paid from November 2016. In the first half of that year alone Wikimart had collected 56 lawsuits from 54 different companies.

~ the day it died ~

On 15 December 2016 Faldin wrote on Facebook that the company he and Kurmakayev had started in the summer of 2008 had ceased to exist. His phrasing was blunt about there being nothing left worth rescuing, neither assets nor the expertise of the people who had held it together. By 28 December the Moscow office was sealed and staff were taking equipment out of it against unpaid salaries.

The site limped into 2017 before going dark, litigation eventually totaled around three billion rubles, and a court did not formally declare the company bankrupt until March 2020, more than three years after everyone involved already knew. Faldin later gave interviews under a heading that translates roughly as beware the investor. It is a narrow lesson and it happens to be the right one: the thing that killed Wikimart was not the Russian market and it was not the competition. It was who ended up holding the shares.

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