Uklon is the most expensive purchase in Kyivstar's history, as well as the second most expensive M&A on the Ukrainian market during the full-scale invasion. The negotiation process between the companies lasted two years, how did the deal amount grow?
Uklon is the most expensive purchase in Kyivstar's history, as well as the second most expensive M&A on the Ukrainian market during the full-scale invasion. The negotiation process between the companies lasted two years, how did the deal amount grow?
In March, Kyivstar announced the signing of an agreement to purchase 97% of the corporate rights of the IT product company Uklon for $155.2 million. In April, the deal was closed after completing all procedures.
"It's hard to say exactly who came to whom. It seems to me that it was a coincidence. As part of Veon's strategy (ed. - the parent company of Kyivstar) to develop a digital operator model, we were analyzing various verticals that might be interesting to us. At some point, we came to the conclusion that the ride-hailing business is quite attractive for us, given the structure of the market in Ukraine, its growth rate, and the presence of a strong local player," Kyivstar CEO Oleksandr Komarov told Forbes Ukraine in an interview about how negotiations with Uklon began.
At the same time, Uklon's founders had thoughts about a potential sale of the business. Therefore, the operator analyzed this issue with the company's supervisory board and Veon, and received the green light to begin negotiations, which began in the first half of 2023.
According to Komarov, the value of the deal has increased by about 20% from the one that the company had already seriously discussed with the supervisory board. And the main driver was Uklon's results, especially the dynamics of revenue for 2023.
"There were bids, but there was no dramatic change in price. But the value of this deal is based on a closed financial period. For us, the closed period is the results of 2024. And they grew quite significantly," the operator's CEO noted.
Uklon's revenue in 2024 was $65 million , according to a Veon report.
“If we hadn’t closed the deal at the end of the first quarter, each additional quarter would have cost us approximately $7–10 million,” Komarov added.
Previously, Uklon CEO Serhiy Grishkov told dev.ua: "We believe that Kyivstar's experience, expertise, resources, and advanced technologies will help strengthen Uklon's leading services, providing users with an even higher-quality, innovative, and convenient product: our riders, driver partners, and business clients."
Another co-founder, Dmitry Dubrovsky, noted that he “always liked the idea of being acquired not by a direct competitor (for example, Uber), but by a large technology player from another industry.”
