According to Read/Write Web, Russia’s biggest online store OZON.ru received $18 million in funding this week from Cisco, Index Ventures and Holtzbrinck Ventures (the venture arm of one of Germany’s largest publishing companies).

The money will help develop OZON.ru’s logistics system, expand its product lines and establish new distribution centers across Russia. The investment round was initiated and managed by Baring Vostok Capital Partners, Russia’s leading private equity investor and controlling shareholder of OZON.

Index Ventures hopes that the OZON.ru investment “will be the first of many we’ll make in Russia.” Company told Read/WriteWeb that EU online commerce activities topped $47.9 billion in 2006, growing approximately 25% over 2005 estimates. Index thinks that OZON “is well positioned to undergo tremendous growth in the next couple of years.”

Accordint to Red Herring, Cisco is beginning to invest in new technologies worldwide to “feed demand for Cisco’s routers and help it stay abreast of new technology in developing markets around the world.” In that piece, an analyst says that Russia has “substantial opportunity [for technology], but also a great deal of risk”.

OZON.ru today offers more than 260,000 items for sale divided into 12 product categories from more than 400 suppliers. More than 3,000 orders per day are delivered to its Russian-speaking internet audience worldwide from OZON.ru’s proprietary distribution center in Tver (160km North of Moscow).

Headquartered in Moscow, OZON.ru was founded in St Petersburg in 1998 originally as an online book community and shop. Following a period of strong expansion and investment by Baring Vostok, the сompany has rapidly strengthened its branding as the first most popular e-commerce site in Russia with high-quality customer service and over 120,000 unique visitors per day. Led by Swiss-born CEO Bernard Lukey since 2005, OZON.ru is now well established as Russia’s leading online retailer.

“While Russia has low Internet penetration in terms of percentage of its overall population, in absolute terms it has as many Internet users as some Western European countries,” said Bob Agee, vice president, Cisco Russia.

“The amount of technical talent in Russia shows that the country is ready to become more technologically advanced. Increased investment in communications infrastructure can help improve productivity, diversify the economy and increase the standard of living across the country.”

“Our venture investment in Russia is a continuation of a global strategy that we’ve implemented in Europe, Israel, China and India, which is to invest in local start-ups and venture teams and help promote the growth of a local innovation economy,” said Hilton Romanski, director, global corporate business development.

“Ozon is the first in what we hope will be an expanding venture relationship between Cisco and Russian entrepreneurs and investment partners.”

Popularity: 2% [?]