Gett shareholder values company's business in Russia at $700 mln
MOSCOW. Aug 16 (Interfax) - Swedish investment fund Vostok New Ventures (VNV), which holds a 3.6% stake in Gett, has valued the ride sharing service's business in Russia at $700 million, fund materials show.
The value of the business was appraised according to the multiplier at which the future merged business of Gett rivals Yandex.Taxi and Uber was valued. Yandex said earlier that the merged business is valued at $3.725 billion, but Renaissance Capital analysts said in a report that this figure was "exaggerated" and valued the business at only $1.4 billion.
VNV said that the deal between Yandex.Taxi and Uber will create a major competitor on the market, but this will mean an end to the price war between these two companies, which will be good for the market and set the stage for profit growth for the whole sector.
The online taxi hailing market does not operate according to the principle of "winner takes all," unlike the online classifieds market, VNV, whose portfolio also includes online classifieds service Avito, said.
Gett founder and CEO Dave Waiser said earlier that the high multipliers for the valuation of the Russian business was good news for the company and its investors, since Russia accounts for about 25% of Gett's business.
Commenting on the deal between Yandex.Taxi and Uber, Waiser said he expected margins on the Russian tax market to increase as a result of the merger of Gett's chief rivals. At present, the biggest taxi services are paying extra and subsidizing trips, and losing money on this, in their fight for market share. In addition, the companies are investing millions of dollars in marketing and promotion of their services, which is putting pressure on margins, market players said.
Waiser said the merger will mean that the only alternative for Gett drivers will be Yandex, which will get control over the joint business with Uber. In the long term, this will mean that all drivers will have both apps, as was the case in the United States with Uber and Lyft, he said.