Yandex and Uber to spin off self-driving car unit into new company

Uber spun off its self-driving unit last year to attract investors led by SoftBank Group.
By : Bloomberg
| Updated on: 04 Sep 2020, 15:44 PM
Yandex self-driving car (L) and Uber app
Yandex self-driving car (L) and Uber app
Yandex self-driving car (L) and Uber app
Yandex self-driving car (L) and Uber app

Yandex NV and Uber Technologies Inc. will spin off the self-driving car unit of their joint venture into a separate company, giving Yandex more control over the businesses and paving the way for new investors.

Russia’s largest internet company will invest $150 million in the new division, Yandex Self-Driving Group BV, the companies said in a statement on Friday. It will also purchase part of Uber’s stake, and as a result the Moscow-based company will have 73% ownership of the division, and Uber will have 19%, with the rest reserved for the unit’s management.

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Yandex will also contribute its car-sharing business to the JV with Uber, which is known as MLU BV and includes ride-hailing and food delivery, the companies said in a separate statement. This will leave Uber with a 33.5% stake in MLU, compared with about 37% as of June 30. Yandex.Drive has about 16,000 cars across several Russian cities.

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(Also read: Uber expands self-driving safety report after US agency slams culture)

The changes will give Yandex more control over the businesses and give it more freedom to develop the technology. Earlier this year, Yandex had been considering buying out Uber’s stake in MLU.

“By spinning off self-driving business Yandex paves the way to attract external investors into it in the future," Sergey Libin, analyst at Raiffeisenbank in Moscow, said by phone. The restructuring and addition of car-sharing “makes it more attractive for a potential IPO."

(Also read: Volkswagen to test fleet of self-driving cars in China's newest EV hub)

Uber spun off its self-driving unit last year to attract investors led by SoftBank Group Corp. Alphabet Inc. raised $2.25 billion for its Waymo self-driving unit earlier this year after having spun it off in 2016.

A spokeswoman for Yandex declined to comment on possible plans to attract external investors into the self-driving unit.

First Published Date: 04 Sep 2020, 15:42 PM IST
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