Mail.Ru Group is ready to enter a new segment: the Internet holding company began negotiations on investments in the group “Lucky”, one of the largest taxi services in Russia. Yandex, competitor Mail.Ru, taxi – the most growing source of income.
The group of companies “Vezet”, created as a result of the combination of taxi order services Fasten Russia (operates under the Saturn and RedTaxi brands) and “Lucky” (brands RuTaxi, “Leader”, “Lucky”), is negotiating to attract investments, told RBC an interlocutor familiar with the details of the negotiations, and also confirmed sources close to the shareholders of the group. Partner UFG Private Equity (owns a stake in “Lucky”) Arthur Hakobyan confirmed to RBC that the fund is negotiating to attract investment in the group of companies “Wezet” with different structures, but refused to name the potential investors.
The main bidder for the purchase of a stake in Luck is the online holding Mail.Ru Group, one of the sources of RBC, who is familiar with the details of the negotiations, says. This information was also confirmed by the investment banker, who is aware of the forthcoming deal, and the top manager of one of the Internet companies. According to the latter, the transaction amount can be “several tens of millions of dollars for an uncontrolled stake in the company.” At the same time, Mail.Ru Group is interested in furthering the share in the group of companies “Luck” to the control, that is, more than 50%, says the source of RBC, who is familiar with the details of the negotiations.
Director General Mail.Ru Group Boris Dobrodeyev declined to comment, redirecting RBC’s questions to the press service of the holding. “We are generally interested in any market that has the potential to apply new approaches and ideas. Including, perhaps, the market of a taxi can become such a market. We do not comment on specific plans for deals, “the press service of Mail.Ru Group told RBC. Alexander Kostikov, Communications Director of the company “Vezet” declined to comment on the topic of investment.
At the same time Mail.Ru Group, according to the source of RBC from the number of investment bankers, is not the only potential investor. So, the company “Luck” was in talks with automakers (AvtoVAZ and Renault-Nissan), as well as “VimpelCom” – primarily to integrate the taxi service into the communication platform Veon.
“Potentially, we are ready to consider the possibility of cooperation with companies that are interested in purchasing Renault cars for their corporate park,” the Renault spokesman said, but the fact of negotiations with “Lucky” did not confirm. The representative of AvtoVAZ also did not confirm this information. “As part of the development of Veon, we are constantly expanding the number of partnerships, now there are more than 50. As our experience shows, offers related to discounts for taxis, as well as for food, are some of the most popular in the application,” says a representative of VimpelCom »Anna Aybasheva. However, she refused to comment with “Luck”. “The offers came to many potential investors, but negotiations with Mail.Ru Group at the moment have advanced most of all,” explains RBC’s interlocutor, close to the shareholders of “Lucky.”
Have arrived on the market
For Mail.Ru Group, this transaction could be the first investment in taxi services, although the beneficiaries of the company already are among the shareholders of similar projects. In the summer of 2015, the beneficiary of Mail.Ru Group, billionaire Alisher Usmanov, along with partners in USM Holdings, invested in the US Uber shares “several tens of millions of dollars.”
According to the results of 2017, the total volume of the Russian taxi market will be 731 billion rubles, of which 65% will go to the traditional offline market, another 20% – to online orders, and 15% – to the gray market, analysts predicted UBS. By 2022, according to their calculations, the volume of the entire market will grow to 1.231 trillion rubles, the share of online orders should increase to 85%, and the gray market – to reduce to 4%.
The company “Luck” and Fasten merged in early May and attracted funding from UFG Private Equity in the amount of “less than $ 100 million.” While the companies Yandex.Taxi, Uber and Gett are primarily focused on ordering trips through the application, taxi services from the group of companies “Wezet” allow you to book a trip either through a mobile application or by phone. The company operates in 120 cities of Russia, Kazakhstan and the Czech Republic.
As RBC previously wrote with reference to one of the market participants, through RuTaxi in 2016, about 1 million trips were made per day, through Fasten – 200-300 thousand. In “Yandex.Taxi” at the end of last year, an average of 500 thousand trips per day, in Uber 150-170 thousand, in Gett – 150 thousand, estimated the interlocutor of RBC. A representative of the group of companies “Wezet” Alexander Kostikov confirmed that at the moment the company carries out more than 1 million trips daily. Therefore, according to the number of trips, the group of companies “Vezet” is the largest player on the market.
According to the previously presented Credit Suisse report, the share of “Lucky” by the end of 2017 will account for 12% of the entire taxi market and 7-10% in the online taxi segment. The main competitor of “Lucky” are the companies “Yandeks.Taksi” and Uber, which in July 2017 announced the merger of their businesses in Russia and the CIS. At the moment the deal has not yet been closed, the parties are waiting for the decision of the Federal Antimonopoly Service, which must be made before November 19. The combined Yandex.Taxi and Uber, according to Credit Suisse forecast, will occupy 9% of the total taxi market, but will be the leader in the online order segment with a market share of 69%.
For Yandex, the share of taxi service in the structure of its revenue, although not comparable to the main source of revenue (for the sale of contextual and media advertising accounts for 93% of the revenue of the holding), but in recent years has been steadily growing. So, following the results of the third quarter of 2017, the turnover of Yandex.Taxi for the first time exceeded the revenue of the direction of electronic commerce (it includes the aggregator Yandex.Market) – 1.15 billion versus 1.06 billion rubles. At the same time, the taxi-aggregator was launched only in 2011, 11 years later, Yandex.Market. In the third quarter, the turnover of taxi services increased by 96% compared to the same period in 2016. In the direction of e-commerce for the third quarter, revenue decreased by 12%.
Based on the number of trips and the previously attracted investments from UFG, as well as the share in the offshore, the cost of the entire group of companies “Vezet” in the last investraunde was about $ 0.5 billion and in the new round could approach $ 0.8 billion, says Raiffeisenbank analyst Sergei Libin. Thus, if Mail.Ru Group invests in the company “several tens of millions of dollars,” according to a source close to the negotiations, the share of the holding in the group of companies “Luck” will be even less than the blocking stake, he notes.
“The taxi market is big and promising, the share of online orders on it is still only 15-20% and will grow actively in the coming years. Therefore, the output of one of the largest players on the Internet market in this segment looks quite logical. For users of taxi services, this transaction is likely to pass quite unnoticed. The only possible consequence is that due to the investments received and to expand the market share, the company may start dumping, “says Libin.
Chairman of the Moscow Chamber of Commerce and Industry Committee on the development of taxi transport Bogdan Konoshenko noted that the interest of Mail.Ru Group to “Lucky” is explained by the fact that this is the largest Russian mediator of a taxi with an average check for the country of 200 rubles. “For Mail.Ru Group this is a great strategic move, an opportunity to diversify its business and get new users,” the expert added. In general, he notes that the market is consolidating, competition on it is intensifying, while the sphere of passenger traffic is becoming more and more technological.
Authors: Maria Kolomychenko, Anna Balashova, Irina Li.
With the participation of: Valeriya Komarova, Galina Kazakulova.
Article in Russian: RBC Daily