Estonian Rate Solutions conquers Europe

Social networking company Rate Solutions, which runs the hugely successful MySpace-like in Estonia, has launched their first Western European sites Alfa in Finland, Zamba in Belgium and Limpa in Netherlands. The goal of Rate is very ambitious, to be the leading social networking player across Europe with their local sites, entering a very crowded market. The Polish site will be launched soon according to company officials media statements. The company is saying they will expand to 15 countries during a few years.

The expansion is supported by 1 mEUR investment from Estonian-Finnish VC MTVP, which seems more like an amount for not more than 1-2 new countries. Also the marketing team is very thin for now. The company will put a lot of hope on viral marketing and organic growth, keeping the costs low that way. We will see how far that investment will take them and if they have some results in the new countries during next 6-12 months to support new investment rounds.

The .fi/.nl/.be sites are up and running, with only around hundred or a few hundred users and photos for now (and some latest photos pages giving errors, hopefully to be fixed soon). They must be still in testing mode. Also many of the registered users there are their own people and friends from Estonia.

In Netherlands they compete with existing large players like Hyves, CU2 and Superdudes/Sugababes. Not sure what the situation in Belgium is? None of European markets are empty, so there must be something to outcompete the existing players.

Rate in Estonia is the largest website, having over 330 thousand registered users and 120 thousand daily visitors (out of country’s population of 1.35 million) mainly in youth segment. Last year Rate sold 51% of the Estonian site to the largest local mobile operator EMT for around EUR 2.5 million. Still being no 1 in one of the smallest European countries has a lot been based on luck and being in the right place in right time.

Rate also runs Face in Latvia (92 thousand users), Limpa in Russia (88 thousand users, although a lot of the Russians from Estonia and other Baltic countries) and Point in Lithuania (46 thousand users).

Time will tell, how good their people, marketing skills and management expertise will be in going to new uncharted markets. Like all of us know, technology plays only a tiny part in this kind of business, it is all about people and users perception.

Good luck for the founders, investors and management team in making this a success!