Ostrovok attracts $25 million from big name home and away fundsNewsBy Linda Fox | March 26, 2013Share This article was originally published on Moscow-based hotel site Ostrovok has struck its most significant funding deal to date with the $25m round led by General Catalyst Partners.Frontier Ventures, Accel Partners and Russian technology investor Yuri Milner have also participated in the Series B round as has former Expedia boss Erik Blachford who was also involved in Ostrovok's undisclosed funding round announced in January 2012.Additional investors include a number of Russia-based banking executives and Silicon Valley investor Shervin Pishevar as well as the startups founders Serge Faguet and Kirill Makharinsky putting in $2m of their own funds.Faguet says the startup was keen to get banking investors on board with a view to 'significant capital raising' in the future but ruled out an IPO in the short to medium term. "IPO has been recognised as creating a lot of problems because it distracts from the business. We're thinking more along on the lines of continuing to raise privately and we're not looking to cash out."Share this quote All of the latest round is being invested in the business which Faguet describes as 'fairly capital intensive' in terms of building relationships with hotels especially as many properties have no online capability.Funds will also go towards product development including third-party API to integrate Ostrovok's inventory within other partner sites and towards boosting the customer service team. "It's also intensive to build a brand because people have a lot of mistrust here. We're already doing advertising on prime time national television and no one else is doing that."Share this quote Ostrovok initially raised $13.6m in July 2011 to help get the service off the ground with GCP and Accel also involved in that round.The startup's plans for 2013 include direct connections with hotels in Europe, Asia and the US.Rival Russian hotel service Oktogo announced funding of $11m just over a week ago.