9 Sep 2020 13:54

Sberbank making new acquisition for its ecosystem with Mail.ru amid regulator's pessimism

MOSCOW. Sept 9 (Interfax) - The transportation and food delivery joint venture between Mail.ru Group and Sberbank is buying an 84.7% stake in Local Kitchen, the companies said.

The deal amount was not disclosed. The venture will invest in Local Kitchen part of the funds previously raised from its shareholders for business development. Local Kitchen's founders will retain the remaining shares in the service.

Sberbank is actively implementing a strategy for creation and development of its own ecosystem. The latest M&A deal came several days after the Central Bank of Russia publically criticized aggressive expansion of major banks forming their own ecosystems not through partnerships with service providers but via mergers.

"Another tendency that is characteristic for the Russian market concerns the means of forming ecosystems. What we see is that if a global giant - like Amazon or Facebook - tries to develop partnerships with suppliers, then in Russia this more often than not happens, regrettably, through mergers of such companies and creation of subsidiaries for oneself in different areas within the ecosystem. Using the financial, technological, and marketing resources of their system, the ecosystems of such companies have the opportunity to develop and further attract clients faster than those competitors that are not included in these ecosystems. This means that entrance to these Russian ecosystems will start to close very quickly, and joining them as an independent partner become more and more difficult," CBR Governor Elvira Nabiullina said at the Association of Russian Banks Congress on September 3.

Mail.ru Group has remained Sberbank's partner in the foodtech and transport sphere. Until recently, the bank also participated in various join ventures with its main competitor - Yandex , but the sides fully ended their relationship in June this year.

Local Kitchen is a food delivery service currently available in 34 regions of Moscow. Couriers deliver orders by bicycle within the radius of a couple of kilometers. The company uses an IT system which it developed itself. Following integration into the ecosystem, the companies could exchange technology, the press release said.

Local Kitchen was founded in 2017. Its investors were entities of PIK Group with a 25.8% stake and Qiwi co-owner Sergei Solonin with 10.2%, who joined the project in spring last year. Managing partner of AFK Sistema Maxim Yanpolsky then entered the company's capital with an 11.9% stake.

In May, O2O Holding received a 30% stake in Local Kitchen as a pledge under a loan agreement for 290 million rubles.

The deal will be closed before the end of 2020. The service plans to cover nearly all of Moscow and attain revenue of more than 3 billion rubles in 2020.

Sberbank and Mail.ru agreed on creation of a JV for developing foodtech business and the transport area in July 2019. In August, a venture fund of Sberbank invested in the grocery delivery company Instamart and created Sbermarket on its basis, which became part of the JV. In May 2020, the JV closed a deal to purchase the controlling stake in the Samokat service, which provides food delivery in Moscow and St. Petersburg. In July, RBC reported that the JV had become interested in buying a stake in the URent electric scooter and bicycle renting service.

In addition, in summer 2020, Sberbank bought the majority stake in the 2GIS mapping service and in August closed a deal to acquire 46.5% of the Rambler Group holding.

Also in summer, Reuters reported the possibility of Sberbank entering online retailer Ozon's capital.

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