Yandex.Taxi, the taxi-hailing company which merged activities in Russia and some neighboring countries with Uber last year, is planning a new acquisition to expand across Russian regions.
The company (formally called MLU) announced today an agreement to acquire the IP and call-centers of Vezet, a taxi-hailing service which is available in 123 Russian cities under the Vezet, Taxi Saturn, Fasten and Red Taxi brands. Vezet partner with local taxi fleet companies, allowing customers to order a taxi either via its mobile app or its call center – in just 20 seconds on average, the company claims.
Vezet’s shareholders will receive new shares in the Yandex.Taxi representing up to 3.6% of the issued share capital of the company at closing. They will also receive “up to $71.5 million in cash, subject to certain operating and integration milestones.”
On their side, Yandex and Uber will own 56.2% and 35% of MLU, respectively, while employees will hold approximately 5.3% under an equity incentive plan.
The deal is subject to approval by the Russian antimonopoly authorities, which the companies expect to get until the end of 2019.
On the practical side, service integration will look as follows:
- Customers will be able to order taxis through the Yandex.Taxi and Uber Russia apps as well as through the Vezet app and call center;
- Vezet customers will also “benefit from various MLU technologies that enhance safety and security;”
- Driver-side apps will be “integrated into a single technology platform,” which will allow passengers to see “lower wait times while drivers will benefit from increased utilization rates.”
- “MLU and Vezet will continue to invest in driver training and support centers, driver loyalty programs, and other services that support drivers and fleet management companies.”
Yandex.Taxi’s press release mentions a “plan to invest approximately 8 billion rubles [roughly $120 million at the current exchange rate] in the Russian regions over the next three years.”
Veto claim from Mail.ru Group
Just hours after Yandex.Taxi announced the planned acquisition, its archrival in the Russian digital sphere Mail.ru Group claimed to “have the right to veto the sale of Vezet Group’s key assets. “
This condition – which was not mentioned in Yandex.Taxi’s initial communication – is “a part of the agreement on issuing a convertible loan,” said Mail.ru Group, referring to a transaction which took place in June 2018.
Thus, the new agreement is subject to “Mail.ru Group’s written consent,” which has not been given yet, which is why the group calls Yandex.Taxi’s announcement “premature.”
The Yandex press service did not answer yet our request for a clarification.
Mail.ru Group has a minority stake in a competitor of Yandex.Taxi called Citymobil. This service saw its market share grow from about 1% in late 2017 to some 4% in mid-2018, according to an UBS estimate. Another estimate put Citymobil’s marketshare at 24.5% in Moscow city as of late 2018 (city authorities cited by TheBell).
Acquisition thirst
To maintain or increase its market leadership, Yandex.Taxi has already made several other acquisitions. In October 2018, it bought the software assets of a Moscow-based company, Nowtaxi, to support the accounting of operations with affiliated drivers. Yandex.Taxi also acquired Partiya Edy (‘The Party of Food’), a St.Petersburg startup that delivers ready-to-cook fresh food in St. Petersburg, Moscow and the surrounding areas.
From the launch of Yandex.Taxi in 2011, over 900,000 drivers connected to the platform, completing 1 billion rides, the company’s press service told East-West Digital News in late 2018. (This number includes the rides ordered through the Uber app after the merge in February 2018.)
Yandex.Taxi is “likely to go public,” said a company executive earlier this year.
