Mail.Ru Group and MegaFon invest $26 million in taxi-hailing service CityMobil

Last week Mail.Ru Group and MegaFon, two leading, LSE-listed players in the Russian Internet and mobile industries,  announced the joint acquisition of a 55% stake in CityMobil, a Moscow-based taxi-hailing service.

After the completion of the round, Mail.Ru Group and MegaFon will respectively own a 26% stake and an up to 31% stake in the company in exchange for capital injections of around $12 million and $14 million, respectively, in a round of funding which was signed on April 5.

Mail.Ru Group specified that CityMobil will not be consolidated in its financial results.

Other unnamed investors took part in the round, which amounted to $35 million in total, according to Russian business daily Kommersant.

Costly “experiment”

“Mail.Ru Group is expanding its presence in O2O services and taxi will become part of our ecosystem. We believe in significant potential of taxi integration with our social platforms and in cooperation with Delivery Club,” stated Boris Dobrodeev, CEO (Russia) of Mail.Ru Group.

Dobrodeev referred, in particular, to Vkontakte (VK) and Odnoklassniki (OK), two major social media platforms in Russia owned by the group.

While Mail.Ru Group and Megafon declined to comment on the deal, an unnamed industry insider told Kommersant that these groups consider the transaction as “an experiment to test the market of taxi aggregators.” The way CityMobil will interact with the existing ressources of the groups remains unclear, the source underlined, while some other investment funds and global players consider an investment in CityMobil, too.

CityMobil’s strongest competitors are Yandex.Taxi, which recently completed a merger with Uber in Russia, and Gett, which announced in late 2016 a massive investment plan to cover new Russian cities.

Sources: Mail.Ru Group, MegafonKommersant

See the full scoop over at East-West Digital News: https://ctrlshift.co/2018/04/09/mail-ru-group-and-megafon-invest-26-million-in-taxi-hailing-service-citymobil/