August 22, 2019 / 8:22 AM / a month ago

Russia's Mail.ru expands in car sharing with YouDrive stake

MOSCOW (Reuters) - Russian internet group Mail.ru (MAILRq.L) has teamed up with investment firm Proxima Capital to buy a controlling stake in car-sharing operator YouDrive, which it may fold into its planned food and taxi joint venture with state-run Sberbank.

The logo of Russian Internet company Mail.ru Group is seen on the facade of its headquarters in Moscow, Russia June 26, 2019. REUTERS/Maxim Shemetov

Mail.ru and Sberbank (SBER.MM) said last month they would invest up to 64 billion roubles ($1 billion) in a platform that will compete with Yandex.Taxi, a unit of Russia’s Yandex (YNDX.O) and U.S. online taxi firm Uber (UBER.N).

Russia’s banks, also including VTB (VTBR.MM) and TCS Group (TCSq.L), have been actively investing in side projects such as internet and telecom services as corporate demand for their services is slow.

Mail.ru did not disclose the size of the YouDrive stake or the cost of its investment, but said the deal included the company’s car-sharing operations and its taxi rental service.

Mail.ru and Proxima are planning to increase the YouDrive fleet to at least 10,000 vehicles by the end of the year, from over 2,500 as of August.

Moscow is among the world’s fastest growing car-sharing cities. Its City Hall over the last couple of years has sharply raised prices for parking in the city center, pushing Muscovites to use their private cars less.

In Moscow’s top locations, an hour of parking costs as much as 380 roubles ($5.80), on a par with the New York, adding to the growing attractiveness of taxi and car sharing services.

Mail.ru Group Chief Executive Boris Dobrodeev said in a statement the YouDrive investment was in line with the company strategy to “promote the development of the Mail.ru Group ecosystem”.

“The deal will also complement the goals of the joint online-to-offline (O2O) platform by Mail.ru Group and Sberbank,” he said.

On Thursday, Russian business daily RBC Daily reported that Sberbank was also in talks to buy a stake in Russia’s 2GIS search and city navigation service.

A source close to the bank told Reuters it was too early to say whether the deal would take place. Sberbank declined to comment.

Reporting by Nadezhda Tsydenova; Additional reporting by Tatiana Voronova; Writing by Anna Rzhevkina; Editing by Katya Golubkova, David Holmes and Jan Harvey

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