Horizon Capital Invests in TCS Bank
Horizon Capital, a leading regional private equity fund manager announced today that it purchased 4% of shares Tinkoff Credit Systems (TCS Bank) for $40 million. TCS is a leading credit card company and the first online bank in Russia. It is controlled 100% by Egidaco Investments Plc. The funding for this deal comes from Horizon Capital’s Emerging Europe Growth Fund II (EEGF II), which was raised in 2008.
Oleg Tinkov, Founder of TCS Bank, said: “We are proud of the business we have built so far. Russia has a very large and growing credit card market, and we are very well positioned to capture this growth opportunity. Our branchless model and superb marketing and IT expertise allow us to provide the highest quality service to our customers. We welcome Horizon Capital as our new partner and look forward to working together.”
Mark Iwashko, Founding Partner and Chief Investment Officer of Horizon Capital, commented on the deal: “We are happy to partner with this outstanding serial entrepreneur who has a proven track record of building successful businesses. TCS Bank is a unique platform for the region with sustainable cost advantage, best-in-class management team, a large and growing base of clients, and tremendous prospects for the future.”
Following this equity transaction, alongside the founder of the bank and majority shareholder, Oleg Tinkov, there will now be four international investment institutions: Goldman Sachs, Vostok Nafta Investment, Baring Vostok Private Equity Fund IV and Horizon Capital.
TCS Bank is going from strength-to-strength, doubling its business for the third year running and making it one of the fastest growing banks in Russia, if not the world. With these outstanding results, shareholders believe that this valuation is just the start.
The branchless TCS Bank (http://www.tcsbank.ru/eng) was established in 2006 by businessman Oleg Tinkov. Bank developed state-of-the-art IT platforms for mass customer acquisition and remote customer service. Since then TCS Bank has established itself as one of the undisputed leaders in the Russian credit card market and the first online bank in Russia.
In 2007 the investment bank Goldman Sachs acquired a stake in TCS Bank, and later in 2008, the fund Vostok Nafta Investment also became a shareholder. In April 2011, the Bank issued its first million credit cards and in April 2012 — its second million.
According to CBR statistics, on 1 October 2012, the Bank took 4th place in terms of its non-delinquent credit card portfolio (RUB40.1 billion), with a market share of 6.8%. Net profit to IFRS in 2011 amounted to $68 million, giving it an ROE of 85%.
In March 2011, Fitch Ratings raised the credit rating of Tinkoff Credit Systems to B, and in April 2011 Moody's Investors Service — to B2. In April 2012, Fitch revised TCS’s outlook from stable to positive which is against the current industry trend and underlines TCS's very strong performance.
About Horizon Capital
Horizon Capital (www.horizoncapital.com.ua) is a private equity fund manager that originates and manages investments in mid-cap companies with outstanding growth and profit potential in Ukraine, Belarus and Moldova. Currently, Horizon Capital manages three funds, Emerging Europe Growth Fund II (EEGF II), Emerging Europe Growth Fund (EEGF) and Western NIS Enterprise Fund (WNISEF), with over $600 million under management.