As Uber continues to work through a huge amount of internal management turmoil, the company is also consolidating and rationalizing more of its international business. Today, the company announced that it will be combining its rides-on-demand business and UberEATS, its food ordering and delivery business, in Russia and neighboring markets, with Yandex.Taxi, the ridesharing business built up by the Russian search giant over several years and the current leader in the market, in what will be a separate, joint venture valued at $3.72 billion.
The deal — which will cover operations in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia — is expected to close in Q4 of this year and has already been approved by the boards of both companies. It’s a substantial operation. Currently it covers 35 million trips each month across 127 cities, with the bulk of those coming from the Yandex.Taxi part of the JV; Uber was only in 21 cities.
“This combination greatly enhances Yandex’s ability to offer better quality service to our riders and drivers, to quickly expand our services to new regions, and to build a sustainable business,” says Tigran Khudaverdyan, CEO of Yandex.Taxi, in a statement. “The combined companies currently perform over 35 million rides a month while growing over 400% year-over-year. Since founding Yandex.Taxi in 2011, we have connected tens of millions of riders and drivers to become the largest and most trusted ridesharing business in Russia and neighboring countries. We are excited to expand on this foundation in collaboration with Uber.” Khudaverdyan will become the CEO of the combined company.
The companies are also each putting money into the deal: Uber is putting in $225 million and Yandex $100 million, giving Yandex a 59.3 share and Uber a 36.6 percent share, with 4.1 percent owned by employees of the company, on a fully diluted basis.
Today, in the conference call, the companies said that one strong option will be for the new business to eventually go public: Yandex is publicly traded, while Uber remains private.
This is a huge move and follows Uber bundling its international business in China last year, where it sold its Uber China operation to Didi, ending several years of bitter and very expensive competition.
The same can be said for the Russian market, where Yandex has been the market leader but has been in fierce competition to hold on to that position, with Uber equally spending big — as it has done in other markets — to stay in the game and dominate.
Given changes in the business at home — namely CEO Travis Kalanick resigning amid a host of scandals involving sexual harassment and other bad management practices — the company appears to be having a wider thinking of its overall strategy.
Some have already started to question whether the company can live up to its $68 billion valuation in the wake of all of its problems, and in the meantime, a number of regional rivals continue to raise funding in a bid to position themselves as credible alternatives in a rapidly evolving market for mass transportation.
Uber says that it has to date invested about $170 million to build and expand its business, which is now active in 21 cities in the region.
“Not only is this partnership good news for our two companies, it’s also great for riders, drivers and cities across the region. This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business,” says Pierre-Dimitri Gore-Coty, Head of Uber in Europe, the Middle East and Africa.
It’s been noted many times before that Uber’s strength is not just in terms of providing cheap rides but in how it has been building a large and powerful logistics business. That in effect means that the company has to invest great amounts not just in customer acquisition and marketing, but tech R&D. In markets where it is still a smaller player, that can prove to be costly.
Yandex is at an advantage because it already had an extensive maps service — like its U.S. counterpart, Google — and it will be contributing that IP to this operation.
“NewCo will draw on the strengths of Yandex, the search, maps and navigation leader in the region, and Uber, the global ridesharing leader, to develop a fast-growing, sustainable business that best serves the needs of riders, drivers and cities,” Yandex said in a statement.
After the closing of the transaction, consumers will be able to use both Yandex and Uber apps while the driver-side apps will be integrated. This will give the whole service a much larger pool of drivers (presuming there wasn’t already a lot of overlap), as well as passengers. There are more details of how the companies compare now in the presentation below:
Our CEO Zamir Shukhov's interview with the SME Innovator magazine about the GVA methodology, acceleration 3.0 and the future of entrepreneurship in Russia.
GVA is recognized as the TOP CHALLENGER according to the UBI Global World rankings of University-linked Business Incubators and Accelerators.
The article on Vedomosti on cooperation between corporations and start-ups. Among examples, there are three GVA's accelerators: Mega Accelerator, PepsiCo LAB and Faberlic FMCG Accelerator.
“Stock investors can’t invest in Uber, but they can invest in Nasdaq-listed Yandex, owner of Russia’s top ride-hailing platform,” writes WSJ reporter Stephen Wilmot, referring to the Yandex.Taxi platform.
The first face-to-face event in the framework of the StartUp Kazakhstan – program orientation took place in innovation cluster of Tech Garden in Almaty on February 1-2. On the first day General Director of the Autonomous cluster Fund "PIT" (Tech Garden) Sanzhar Kettebekov and CEO of Global Venture Alliance Zamir Shukhov addressed to the participants with the introductory speech.
How do the local startup scenes look like in Estonia, Poland, Russia, Ukraine — but also in less known countries, from Bosnia-Herzegovina, to Moldova, to Georgia? How much do VCs invest these countries? Are corporations involved in these emerging ecosystems? Which are the most well-funded startups, and which younger ones should be followed? Why do so many ICOs come from Eastern Europe?
The beginning of this year saw major moves on the Russian eSports scene, a sizable European market with established players operating globally. Thus, last week Mail.Ru Group — an LSE-listed Internet company which controls the largest Russian-language social networks and a range of online gaming companies — announced the full acquisition of ESforce.
GVA’s partner Pavel Luksha, founder Global Education Futures and professor at Moscow School of Management, has a new report out on what graduates should know and be able to do. “Skills of the Future: How to Thrive in the Complex New World” was developed with WorldSkills Russia during sessions of the Atlas of Emerging Jobs project. The report is a thoughtful review of global trends, changes in work and concludes with implications for education. Not a continuation of the present, the authors “believe that mankind should take a serious approach towards the formation of a desired image of the future.”
On January 22 during the official visit of the President of the Republic of Kazakhstan Nursultan Nazarbaev to the USA the autonomous cluster fund Tech Garden signed a number of important agreements with American companies on the digitization of the economy of Kazakhstan.
At the international GELP Moscow 2017 Summit, which was held in Moscow on 1st to 3rd of November, leaders of Russian and foreign education from 12 states outlined practical steps for systematical change of the global educational environment, taking into account the existing global challenges of civilization.
Global Venture Alliance took part in a closed round table session organized by Forbes Russia.
The authoritative international alliance Global Education Leaders` Partnership (GELP), which influences the development of school education abroad, for the first time, chose Russia as a meeting point for leaders and experts of the world educational community. The official operator of GELP is the Global Venture Alliance.
Global Venture Alliance is the general sponsor of the event on the occasion of the 100th anniversary of the magazine Forbes.
The Global Venture Alliance team on October 17 at the international forum "Open Innovations 2017" in Skolkovo organized a closed signing between RZhD, IBM, NES and NCC in the field of transport logistics.
IKEA Centers Russia and GVA have identified 9 start-ups that will go into the MEGA Accelerator business incubator. Theese are Altair VR virtual planetarium, mobile application Save4time, virtual bot MRBot, VR-platform Hexa, interactive game Ligrook, time scheduler Verme, HR-robot Robot Vera, corporate messenger Beesender and IT-service for lawyers Bots & Partners. This was reported to Firrma in IKEA Centres Russia.
Tim Cook has not-so-subtly hinted that Apple is working on some sort of augmented reality product. And while ARKit may be the start, a patent application published today hints at what Apple could be picturing down the road.
Apple has teamed up with Australian-based Cochlear to bring iPhone users the first made for iPhone Cochlear implant.
Approved by the U.S. Food and Drug Administration in June, Cochlear’s Nucleus 7 Sound Processor can now stream sound directly from a compatible iPhone, iPad or iPod touch to the sound processor.
Google’s London-based AI outfit DeepMind has created two different types of AI that can use their ‘imagination’ to plan ahead and perform tasks with a higher success rate than AIs without imagination. Sorry if I made you click because you wanted AIs predicted flying cars. I promise this is cool too.
Scientists at MIT are using Wi-Fi and AI to determine your emotional state. They’ve created an algorithm that can detect and measure individual heartbeats by bouncing RF signals off of people.