In early February, Yandex NV (YNV) - the Dutch parent company of Russia's online giant Yandex, often referred to as the "Russian Google"- announced its long expected exit from Russia. YNV is selling its Russian assets to a consortium of investors led by the Russian management team for RUB475bn ($5.2bn) in the largest corporate exit from Russia since the country's invasion of Ukraine in February 2022.

After shedding its Russian operations and severing all of its ties to Russia, YNV will have to reinvent itself as a global company, building on the experience of its team in developing cutting-edge tech over the last decade or so.

"YNV will be completely disconnected from Russia," a source familiar with the company tells bne. "There will be zero operations in Russia, zero investment from Russia, zero employees in Russia."

YNV's ambition is to build a leading European developer of AI services and solutions, headquartered in the Netherlands.

 

What will YNV be doing?

Under the asset sale agreement, YNV (which will be rebranded after the transaction completes) will focus on several areas, all of which are connected to artificial intelligence. Specifically, these areas are:

●     self-driving cars and delivery robots

●     AI cloud computing

●     machine learning and data labelling

●     ed-tech.

In the area of self-driving tech, YNV had started to expand successfully in the United States and other markets, but this expansion had to be put on hold after the Russian invasion of Ukraine. Meanwhile, what started as a data labelling business has been evolving into the large language model (LLM) space. In ed-tech, YNV is running two types of programs, one of which targets people with no tech background who get trained for cutting-edge tech jobs within a year, while the other targets senior professionals with a substantial track record in tech.

 

People as the main asset

After the sale, what YNV is left with is a team of about 1,300 employees, of whom about 1,100 are senior tech engineers and a world-class data centre in Mäntsälä, Finland. The majority of the R&D team are former Yandex employees who left Russia after the start of the war in Ukraine. However, the management structure is more mixed, and, gradually, the overall proportion of Yandex alumni is likely to decline as more global personnel are hired.

Currently, YNV's employees are spread across various countries, but the company plans to have the largest presence – of roughly 500 people by the end of the year – in Amsterdam, where it is headquartered. R&D hubs are also being established in Israel and cities in Europe, the UK and US.

Meanwhile, Yandex co-founder and former CEO Arkady Volozh, who has been busy with the company's global development since his relocation to Israel in 2014, may also play a role in YNV in the future, but he is currently sanctioned in the EU, which creates an obstacle against his involvement. Still, if the sanctions against him are lifted, and, as reported by bne, this looks like it’s about to happen, this will free him up to play a leadership role in the company.

 

Focusing on AI-based tech

YNV already has several projects centred around AI: Nebius AI, an AI cloud platform that is one of the largest providers of GPU capacity in Europe; Toloka AI, a data solutions partner for GenAI and LLM development; Avride, a leading developer of self-driving tech, and TripleTen, an EdTech service that equips people with in-demand tech skills.

 

Nebius AI

This is an AI-centric cloud platform that offers robust infrastructure and computing capacity for seamless AI deployment and solutions based on machine-learning. Nebius AI owns Yandex N.V.'s data centre in Finland – one of the greenest data centres in the world. There, it has built a top-20 global supercomputer ("ISEG").

 

Toloka

Toloka AI offers data-for-GenAI solutions at all stages of the GenAI lifecycle, from data annotation and generation, model training and fine-tuning, to quality assessment of LLMs for accuracy and reliability. Toloka AI’s solutions leverage both AI-powered auto labelling and human expert input to ensure quality and optimized cost.

 

TripleTen

With its more than 15 years of experience preparing specialists in the science, technology, engineering and mathematics (STEM) field, TripleTen provides education in in-demand tech skills in software engineering, data science, BI analytics and quality assurance. TripleTen has over 60 partner employers worldwide, while its programs combine bootcamp & massive open online course (MOOC) formats and promote inclusivity in IT for individuals from underrepresented groups. TripleTen's main markets are expected to be the USA, Latin America, Southeast Asia and Israel.

 

Avride

YNV's self-driving car division is one of the world's leading developers of self-driving tech, with self-driving projects successfully piloted in Europe, the Middle East and North America.

Avride’s core product portfolio includes an autonomous fleet and delivery robots designed for various transportation scenarios such as ride-hailing, logistics, e-commerce, and food/grocery delivery.

Avride's ambition doesn't stop at passenger transportation services, the company says, adding that it is continuously leveraging its team's talent and innovation to develop delivery robots that promise to redefine the logistics industry. "We are already helping our partners across different countries, from South Korea to UAE, to expand their delivery capacity and improve efficiency while providing their clients with high quality service," Avride says on its website.

 

"The best way to build value"

Currently, YNV’s shareholders are mainly based in the US, UK and Europe. Once the exit from Russia is completed – which is expected within the next couple of months – the Dutch company should receive proceeds from the sale of the Russian assets. 

A significant amount of that cash will be distributed among the existing shareholders, while the rest will be invested in YNV's operations.

At the moment, all of the company's core businesses generate revenue, but new commercial and revenue generating possibilities are expected to grow significantly once the divestment process is complete.

The company continues to invest in all of the businesses, and is expected to seek new investors and sources of funding in due course.  The company will not raise money in Russia or from Russian investors, according to a source familiar with the company’s plans.

"The Russian assets are being sold at a significant discount, but we believe this is the best deal that could be achieved in the current environment,” the source said. A number of other international companies have already seen their assets in Russia effectively expropriated by the State.  "This transaction is the best way to recover value for shareholders."

 

Russian Yandex' new owners

Meanwhile, the list of new owners of Yandex' Russian assets includes, apart from oil giant Lukoil, several little-known companies, which, according to a report in the Russian online magazine The Bell, could represent the interests of other individuals.

Yandex' new owners are:

Argonavt, owned by Lukoil

Infinity Management, a firm owned by venture investor Alexander Chachava. His other company, LETA Capital, is known for the acquisition of VK's gaming division My.Games in the autumn of 2022 for $642mn.

Meridian Service, a company owned by Alexander Ryazanov, formerly a top exec of Russian natural gas behemoth Gazprom

IT.Elaboration, a firm own by obscure entrepreneur Pavel Prass. According to The Bell's report, Prass is associated with Yuri Kovalchuk, an entrepreneur close to president Vladimir Putin.