Sberbank, to set up Yandex.Taxi rival as Russia's internet booms

MOSCOW (Reuters) - Russia’s Sberbank and internet firm said on Thursday they would invest up to 64 billion roubles ($1 billion) in a new joint platform for taxi services and food, as online sales in the country gather pace.

FILE PHOTO: A man takes a picture of the logo of Russian bank Sberbank on a screen during a session of the St. Petersburg International Economic Forum (SPIEF), Russia June 6, 2019. REUTERS/Maxim Shemetov/File Photo

The joint venture will compete with Yandex.Taxi, a unit of Russia’s largest internet search engine Yandex and U.S. online taxi service Uber.

The Sberbank-Mail.Ru partnership will broaden the geographic reach of Delivery Club, one of Russia’s biggest food delivery services, and accelerate the regional expansion of Citymobil taxi, the companies said.

“This is a key step in building a business that will have a significant impact on Russia’s digital economy,” Group CEO Boris Dobrodeev said in a statement.

“The Russian online food delivery and taxi services markets have considerable growth potential.”

The platform based on Delivery Club and Citymobil may be valued at over 100 billion roubles ($1.58 billion), said in a statement.

The deal between and Sberbank could mean fewer joint projects between Yandex and Sberbank in the future, VTB Capital analysts said.

At the moment, Sberbank has two major projects with Yandex - joint ventures Yandex.Dengi, or Yandex.Money as it is known in English, and Yandex.Market.

“We don’t see any conflict in relation to our successful business with Yandex in e-commerce,” Lev Khasis, Sberbank’s first deputy chief executive said on the conference call.

“Joint business with Yandex will keep developing,” Khasis said.

Sberbank shares were up 0.04% and Mail.Ru was 0.2% higher following the announcement.

The joint venture will operate in markets worth more than 1 trillion roubles combined over the next three years, the companies said.

The partners said they will hold an equal stake and may consider listing the joint venture in the next couple of years, following the example of Yandex.Taxi which is considering an IPO. Group will contribute to the new company its 100% stake in Delivery Club and 22.69% stake in Citymobil, as well as 7.7 billion roubles.

Sberbank will contribute its 35% share in restaurant marketing digital platform Foodplex and nearly 38 billion roubles in cash. and Sberbank may invest additionally up to 5.1 billion roubles and 13 billion roubles respectively, depending on the joint venture’s performance, they said.

The companies were considering including in the platform Instamart food delivery service, launched in 2013.

Cell phone operator Megafon earlier agreed to sell its stake in to China’s Alibaba Group Holding Ltd as part of a deal to secure 24.3% of online retailer AliExpress Russia.

In Russia, the main competitors of and Yandex in online retail are privately-owned and Wildberries platforms.

Reporting by Anna Rzhevkina and Nadezhda Tsydenova; editing by Katya Golubkova and Elaine Hardcastle