CHAPTER 7: TECNOLATINAS PROFILES
OLX: Argentina’s First Global Internet Brand
Estimated Valuation USD 1 billion
Industry: Software & Services
Country: Argentina – India
CEO: Alec Oxenford
HQ: Buenos Aires, Argentina
Full time employees: 1,200
While not exactly a new vertical, online classified ads have never been done right in Latin America and other emerging markets. Until OLX popped up that is. Founded in 2006 by Argentina’s own Alec Oxenford and the French entrepreneur Fabrice Grinda, this company brought classified advertisement to the masses. Through a very simple interface, and no cost whatsoever, the product allows people to offer products and services and reach millions of potential buyers not just through the site’s listings, but also on search engines and all kinds of sites through very well placed ads, and even on the social networks.
Focusing first on a handful of emerging markets, OLX was able to learn, and grow smartly, developing versatile technologies that adapt well to countries where most of Internet surfing is done from mobile devices. Such is the case of India- where the company is rocking it since its inception -, where the late bloom of the web revolution occurred through smartphones and GPRS, EDGE, and now 3G networks rather than on laptops and cablemodem.
The possibility to create rich ads, including video, photos, text and all kinds of multimedia content, as well as the large volume of traffic the sites receive after it was positioned as the undisputed leader in its segment in multiple markets has sealed its success, and has paved the way for its constant grow since its first days. OLX leads its segment in India, Poland, Pakistan (where it bought competing site Asani in March, 2015), and in Brazil, where it merged with the Bomnegócio (BOM) Business Platform. The company is also a significant player in other countries like Argentina, where it manages a significant portion of its operation.
The company currently has 1,200 employees, with offices in 40 countries, although it can be used in 118. But this is not the most impressive. Each month it accumulates 11 billion page views, it serves 25 million ads, and 8.5 million transactions are carried out in its sites.
OLX’s business model is simple. For its users it is free to use, although they can purchase advertisement to maximize their exposure. Payments for articles published are made offline, thereby freeing OLX from legal issues and payment infrastructure in all of the countries in which it operates. This is a clear differentiator from platforms like MercadoLibre, bringing to closer to products like Craigslist. It also means a lower barrier for users in mostly non-bancarized countries, where online payments are inaccessible to a big portion of consumers.
OLX has VC investment funding from Bessemer Ventures and General Catalyst Partners. In 2010 they themselves decided to sell a major stake of the company to the South African group Naspers. With this investment OLX acquired a strategic partner to permit them to grow at the necessary pace to maintain their leadership over competitors such as Quikr.
The strategy the company followed breaks many entrepreneurial paradigms. Instead of going to the most familiar markets to them – Argentina or the US – OLX instead decided to go with the available market. Oxenford referred to his decision as “Approaching Martians”, or going to an unfamiliar exchange. And it paid out, as it allowed the company to seize the opportunity in new markets, and to develop a location-independent technology that would later allow it to expand to new markets in an easier way. When it comes to small transactions people just want them done in the simplest way possible, and OLX’s technology does not rely on the peculiarities of local markets, or in different national commercial laws; making it completely flexible and easy to expand.
Alec Oxenford, is one of the most highly recognized entrepreneurs in the Latin American digital entrepreneur ecosystem. Those who know the history of the local Internet industry know that back in the old days, the region’s electronic commerce was divided among two equally powerful markeplaces: DeRemate and MercadoLibre, which formed a duopoly. After playing their cards smart, and getting involved with Ebay, the folks at MercadoLibre managed to achieve a significant growth and absorb its rival. A company that had been founded by no other that Oxenford. It took him a few years, but through OLX this clever maker found a way to get back to the top and to help millions of people buy and sell online in a yet simpler way.
And OLX is not done yet. The company plans to keep growing, and it is planning an IPO for 2016, most possibly on Wall Street. But as the first truly global brand created in Argentina keeps on expanding to new markets, we’ll have to sit and wait to see what happens.
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