Yandex-Uber JV MLU acquires regional rival Vezet for shares and $71.5M in cash

On-demand transportation giant Uber made its name in part by aggressively entering new markets on a path of organic growth, but in recent times, it has shown itself more amenable to the concept of expansion through acquisition. Today, MLU, Uber’s ridesharing and food delivery JV with Yandex (by way of covering cities in Russia and surrounding regions, announced that it is buying Vezet, a smaller rival that operates in 123 markets in the same region, for a price that’s estimated to be in the region of $204 million.

Alongside that, MLU said that it would be investing a further 8 billion rubles ($127 million) in the Russian regions over the next three years, with half toward safety and security — including driver training — and half for “supporting regional drivers and taxi fleet companies.” (The latter could be in the form of special incentives to continue encouraging them to drive with MLU over others, and other loyalty programs.)

Current shareholders of Vezet “will receive new shares in MLU, representing up to 3.6% of the issued share capital of the company at closing, together with up to $71.5 million in cash,” based on Vezet meeting certain performance and integration targets, the companies said. Part of that integration will involve moving all of Vezet onto a single platform with MLU.

To be clear, the companies did not disclose the approximate valuation of the deal based on these percentages, but as a marker, when Uber last valued MLU ahead of its public listing, it put the figure at $3.68 billion. That would put shares of 3.6% at just under $132.5 million, valuing the Vezet transaction in total at around $204 million. (This is assuming that the valuation of MLU, prior to this acquisition, has not changed in the last three months.)

That is, if it goes ahead. After this article went to publication, a spokesperson for — which had issued a convertible loan in June to Vezet — got in touch to say that the announcement was “premature.” hadn’t formally approved the deal, and under the conditions of that loan, it has a right to veto any sale. Meanwhile, Vezet said in response that it’s abiding by the terms of the loan: has not converted the loan into shares at this point, so it can be repaid, and this is what Vezet said it intends to do. (It’s not clear how big the loan was.)

If completed, the deal will slightly reduce Uber’s stake in the JV: MLU notes that following the completion of the acquisition, Yandex NV will own 56.2% of MLU and Uber will own 35.0%, with 5.3% held by employees (part of the equity incentive plan).

The move speaks to the inevitable consolidation that has happened, and will continue to happen, in the ridesharing market. Vezet (which has a nice double-meaning in Russian: “driving” and “lucky” — or maybe more accurately “things are going your way”) itself is a combination of some smaller businesses, and today operates services under four brands: Vezet, Taxi Saturn, Fasten and Red Taxi.

It will also help MLU potentially remain in markets where it has faced some issues in the past. In Kazan, for example, some had called on the government to ban MLU (specifically That hadn’t come to pass, although the prospect of such legal actions might be diffused if acquires a local operator that’s had a more harmonious rise in the market.

Vezet’s business model is built around providing a platform for individuals and existing fleets, which can use it to get routed to passengers looking for a ride from A to B.

Like Uber and the many others in this business area, Vezet uses an app-based interface, but given its footprint and how it covers markets where smartphone penetration and usage are not as extensive as in mature markets, it also allows people to order rides through call centers. This deal will include all of Vezet’s assets.

While Uber originally forged an empire by entering markets on its own steam and building businesses from scratch (using tens of billions of dollars in VC funds to do it), in more recent years it’s formed regional joint ventures, including merging its operations in China with Didi and Southeast Asia with Grab alongside its Russia move with Yandex. It has also started to acquire businesses to move into new markets, such as its recent deal to buy Careem for more than $3 billion to make a big splash in the Middle East.

The acquisition, if completed, is expected to close at the end of the year, the companies said.