On October 12, Allegro became Poland’s biggest-ever debut on the Warsaw Stock Exchange and broke the record of IPO. Its listing price leapt more than 60% in the first hours of trading pushed to the second place the Polish video game publisher CD Projekt valued at $12.3 billion.
AIN.TECH tells the story of Allegro, an auction platform for hobbyists that has transformed into the most popular online shopping destination and the biggest listed company in Warsaw with a market value of about $19 billion.
History of the company
Allegro was founded in 1999 in Poznań by Dutch entrepreneur Arjan Bakker as an online auction platform. Bakker has never been involved in IT before. Being a chemical engineer, he worked in marketing and sales in the chemical company DSM in the Netherlands. When he was 25, he was invited to Poland by his friend to establish their own firm that imported office equipment, wooden items and then distributed software for finance and computer hardware.
After their firm filed for bankruptcy, Arjan Bakker, being inspired by the idea of profitable online business eBay, decided to implement the auction model in Poland. The Allegro program, as well as its name, was created by 19-year-old Tomek Dudziak taking a German website olando.de, which was bought by eBay later, as a model. The software of the first version of the website was so small that it could fit on one floppy disk.
Almost already after its launching, in March 2000, Allegro was purchased by the British online auction site QXL Ricardo plc for $75,000. In 2002, when the number of auctions exceeded 1 million, Allegro launched its online payment system PayU that now has local offices in Asia, Central and Eastern Europe, Latin America, the Middle East and Africa.
In 2006, after a year of its establishment, a price comparison website Ceneo.pl became a part of Allegro. After that, in 2008, both companies were acquired by global South African internet group Naspers for $1.5 billion. According to the Cape Town-based company, Allegro was bought to establish other fast-growing businesses in Poland, such as e-commerce website OLX and to continue the scaling of payment platform PayU.
In 2016 Naspers sold its Polish e-commerce businesses Allegro and Ceneo to funds advised by a consortium of private equity firms that includes Cinven, Permira and Mid Europa for $3.253 billion keeping OLX and PayU. It was the largest transaction in Poland’s digital sector and one of the largest transactions of this kind in Europe.
Though aimed at the Eastern European market, having over 16 million users in 2017, Allegro seriously competed with local rivals, the Naspers-owned OLX.pl, as well as American firms like eBay and Amazon.
In 2018 Allegro acquired an online ticket sales company operating in Poland’s entertainment industry eBilet for an undisclosed amount. It allowed both companies to expand product and service offerings on their respective platforms, as well as increase their potential customer base.
A year later Polish e-commerce giant bought one more company – fintech FinAi to provide its financial services such as online loans and deferred payments internally. As far as is known, Allegro recently launched Allegro Pay, the company’s own FinTech offering, with beta-testing expected to continue until the end of 2020. At the same time. it continues to offer financial services in cooperation with external partners – PayU and Przelewy24.
Allegro Group Ukraine
In 2007 the Ukrainian branch office of the Polish Allegro Group was established. It included such e-companies as OLX.ua (Slando.ua), Aukro.ua, EVO Group, Ria.ua, ModnaKasta.ua and others. After Naspers had sold Allegro Group in 2016, all Ukrainian projects left the Group but stayed owned by Naspers.
In 2018 Ukrainian marketplace Rozetka acquired all stakes of Naspers in EVO company. The South African internet group only owns OLX in Ukraine now.
E-commerce giant today
It is the most popular shopping platform in Poland and one of the largest e-commerce brands in Europe. It is a part of Allegro Group that owns Allegro.pl, the price comparison platform Ceneo.pl, and tickets service eBilet.pl.
The company operates an online marketplace model – over 20 million monthly visitors can buy whatever they need from more than 117,000 companies selling on the platform. There are over 164 million offers across varied categories covering electronics, home and garden, sports and leisure, fashion and shoes, health and beauty, books, and others.
Allegro marketplace platform attracts the equivalent of 63% of Polish residents aged 16 and above and 76% of all Internet users in Poland. The Group is not going to stop there and is planning to strengthen its current business footprint inside Poland and to grow outside in the medium-term.
