US-based ride hailing service Uber agreed to yesterday invest $225m in a company that will merge its operations in Russia and some neighbouring countries with that of Russia-based internet company Yandex.
The entity will consist of Uber’s on-demand ride and food delivery assets in 21 cities across Russia, Azerbaijan, Belarus and Kazakhstan and Yandex’s analogous subsidiary, Yandex Taxi, which was founded in 2011 and which is also present in six countries including Armenia and Georgia.
Taking its assets and investment into account, Uber will own a 36.6% stake in the company, which has an overall valuation of $3.73bn, and will have three of its seven board seats.
Yandex will invest another $100m and will hold 59.3%, while the remaining 4.1% will be owned by employees. The combined company, which is yet to be named, will be operational in 127 cities and will also make use of Yandex’s online and mobile mapping capabilities.
Pierre-Dimitri Gore-Coty, head of Uber’s business in Europe, the Middle East and Africa, said: “The new company’s goal will be to serve the needs of riders, drivers and cities as we develop a fast-growing, sustainable ridesharing, food delivery and logistics business in the region.
“Combining Yandex’s local expertise in search, maps and navigation with our leading global experience in ridesharing will enable us to build the best local services and provide a credible alternative to car ownership across the region.”
Tigran Khudaverdyan, chief executive of Yandex Taxi, added: “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.
“The combined companies currently perform over 35 million rides a month while growing over 400% year-over-year.”
Khudaverdyan will take the CEO role in the new company, but Uber and Yandex’s services will continue to operate independently until the deal is closed, at which point they will integrate the app and their drivers.