The deal to merge operations in Russia was announced in the first semester and recently received approval from Russia’s Federal Anti-Monopoly Service (FAS).
Yandex, “the Russian Google,” commands 54% of online searches in the country and claims 61% of online advertising. Yandex.Taxi is a subsidiary of Yandex that accounts for 60% of all taxi rides in Moscow. Russian company with such a dominant position, other companies in the same sector were struggling to get into the market.
America’s biggest ride-hailing operator, Uber, has agreed to invested $225 million in a new venture with Russian company Yandex – which will invest $100 million and remain majority stake holder with 59.3% ownership. The company, worth $3.725 billion, will operate in 127 cities across Russia, Kazakhstan, Azerbaijan, Armenia, Belarus, and Georgia.
Echoing Uber’s story in China, Russia has proven to be a challenging market for Uber. One Yandex investor commented: “For Uber it’s not a bad deal — they have one headache less, they will be part of the winning team, and they’re probably going to get a fair share of that.”
Pierre-Dimitri Gore-Coty, Uber’s head of Europe, Middle East and Africa, said in a statement: “This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business.” Both Uber and Yandex rider apps will continue to operate as normal. Growth opportunities for the new company include the integration of Yandex’s ecosystem and Uber’s food delivery program.
The joint venture is to be completed by January 2018 and expected to have monthly gross bookings of about $131 million.