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Yandex-Sberbank Joint Venture: Who Owns What in Yandex.Market?

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Mar. 26 2018, Updated 7:32 a.m. ET

Deal valued Yandex.Market at $1.0 billion

Yandex (YNDX) and Sberbank are forming a joint venture based on Yandex’s e-commerce platform, Yandex.Market. Sberbank is a state-backed banking giant in Russia. Yandex agreed to sell a stake in Yandex.Market to Sberbank, transforming the business into a joint venture.

Sberbank agreed to invest $500 million for a stake in Yandex.Market. The deal valued the e-commerce business at $1.0 billion. Yandex and Sberbank are slated to own equal stakes in Yandex.Market.

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Sberbank explored a joint venture with Alibaba

Sberbank explored an e-commerce joint venture with Alibaba (BABA), but the discussions ended without a deal because the parties reportedly couldn’t agree on how to share ownership in the joint venture.

Sberbank is looking to expand into the digital sector to try to profit from the sector’s growth and remain relevant in the digital age. Technology is disrupting many legacy industries, as you can see from Amazon (AMZN) teaming up with Berkshire Hathaway (BRK.A)(BRK.B) and JPMorgan Chase (JPM) in what could shake up the health insurance industry. Alphabet’s (GOOGL) Waymo and Uber are also shaking up the traditional automotive industry with their autonomous driving technologies. Ford (F) and its peers have had to respond by developing their own autonomous systems.

Yandex.Market revenue grew 3.0%

Yandex and Sberbank committed to leveraging the strength of their respective core businesses to boost the growth of Yandex.Market.

Yandex.Market generated $25 million in revenue in 4Q17, representing an increase of 3.0% year-over-year. Yandex.Market was Yandex’s slowest-growing business in the quarter, as you can see in the chart above.

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