PostService Group, the Latvian private-sector postal operator, has attracted a EUR 1.5m investment from private equity group BaltCap.
The company said it intends to use the investment to develop its postal and courier services within the Latvian market, but also to expand its export business.
BaltCap is an independent private equity and venture capital firm with a EUR 190m investment portfolio, which specialises in midmarket buyout and expansion investments in the Baltic States.
The investment in PostService Group includes funds from private investors as well as from the EU-sponsored development programme JEREMIE – the Joint European Resources for Micro to Medium Enterprises – which is administered by the Latvian Guarantee Agency.
The company said its investment in PostService Group came on the back of rapid growth in the e-commerce retail market and resulting demand for convenient, effective delivery of goods purchased online.
Janis Pranevics, associate director at BaltCap, said: “With more than 10 years of experience in the postal industry, PostService Group has excellent growth potential – not only in the local postal and parcel delivery market, but also in the export markets as a developer of automated last mile delivery solutions.”
PostService Group has developed from its origins delivering newspapers and unaddressed advertising mail around 10 years ago to enter the postal market and registered mail market, winning contracts with some large utility and telecoms firms to deliver transactional mail. Originally known as SIA Reklāmas Pasts (SIA Advertising Post), it changed to its current name in 2008.
The company grew its turnover from about LVL 577,000 (EUR 821,705) in 2008 to around LVL 4m in 2010 (EUR 5.7m).
In recent years the company of around 400 employees has expanded into the parcels business, investing more than LVL 1m (EUR 1.42m) in developing its own parcel locker terminals, called pasta stacija (postal stations) with the launch of units in 30 Latvian cities from the end of 2010.
The postal station service now allows consumers to receive e-commerce purchases round the clock, or send parcels between different postal stations overnight, with deliveries made six days per week.
PostService has been looking to expand its parcel terminal business overseas through its PostService Engineering subsidiary.
Nadezda Razumova, owner and chair of the management board at PostService Group, said working with BaltCap should yield good results in the near future.
“Together we will create a success story for both companies. Experience from our co-operation, which so far has been relatively short but intense and valuable, confirms that,” she said.
“We have ambitious plans for the Latvian postal and courier market and we also aim to bring our export business to a whole new level.”