Uklon Plans Merger with Largest Telecom Operator Kyivstar

Ukraine’s leader in the online taxi market, Uklon, is on the verge of being sold to the largest telecom operator in the country, Kyivstar, after years of competing with international players Uber and Bolt, Forbes Ukraine reported.

In December 2024, Kyivstar applied to Ukraine’s Antimonopoly Committee to acquire the company, according to media sources.

This is a pivotal moment for the company whose revenues for the first quarters of 2024 reached Hr. 1.2 billion ($28.6 million) – twice as much as during the same period a year before.

An anonymous ride-hailing market manager told Forbes Ukraine that Uklon’s co-founders have been looking to exit the business for several years. “Since they first considered it, the company has reached its peak state for a sale,” the source said.

Over the last year, Uklon’s co-founders Serhii Smus, Vitalii Dyatlenko, Dmytro, and Viktoriia Dubrovskyi have not been involved in operational management, hiring Serhii Hryshkov as CEO instead, Forbes wrote.

The three switched to working for the company’s supervisory board.

Forbes Ukraine analysts estimate Uklon’s current valuation at $40–80 million.

Why are Uklon founders are selling the successful company

The country’s number one ride hailing service and taxi company, Uklon is now finding Ukraine’s market too narrow to operate – and a competitor, the Estonian taxi service Bolt is very close to being neck and neck.

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“There’s no room for significant growth in Ukraine’s market,” a ride-hailing market insider told Forbes Ukraine. “Uber has nowhere left to push, and competing with Bolt is expensive.”

“Bolt has a strong foothold,” Vitalii Laptenok, managing partner at Flyer One Ventures, told Forbes Ukraine. “If Bolt decides to invest $10 million annually in Ukraine, it will be hard to compete with.”

From 2016 to 2021, Uber invested up to $40 million in Ukraine, former regional manager for Bolt, Taras Potichnyi, told Forbes in May.

“Uklon sees that we’re catching up quickly,” Bolt CEO and founder Markus Villig told Forbes Ukraine in July 2024. “Based on market trends, we’ll become number one in Ukraine within three years.”

To maintain its leading market position, Uklon needs an investor with a thick wallet – Kyivstar with its 23 million customer base in Ukraine and expertise on foreign markets from its parent company VEON seem a good bet.

VEON operates in Kazakhstan, Uzbekistan, Pakistan, and Bangladesh. Foreign market expansion has been so far unsuccessful for Uklon.

Since 2017, it has launched in Georgia, Moldova, Azerbaijan, and Uzbekistan, but has since pulled out of all but Uzbekistan, where it completes over a million trips per month, Hryshkov told Forbes Ukraine in August 2024.

Kyiv Post previously wrote that Uklon pulled out of Azerbaijan due to limitations imposed by Baku’s new ride-hailing regulations.

The deal with Kyivstar represents “smart money,” where the investor brings expertise, the ride-hailing market insider told Forbes Ukraine. “Uklon will find it easier to enter markets where Veon subsidiaries operate, leveraging their insights,” the source said.

The media outlet also speculates the new capital will help Uklon become more aggressive.

With Kyivstar’s backing, Uklon could take more risks, an investment market source told Forbes. “When it’s your own cash, you’re cautious. When you have a strong strategic partner, you can be more aggressive,” the source said.

In Q3 of 2024, Kyivstar’s revenue grew by 17.9% to approximately Hr.10.3 billion ($245.2 million), with earnings before interest, taxes, depreciation and amortization (EBITDA) increasing by 6.9% to approximately Hr. 5.9 billion ($140.5 million), according to the media outlet.

Kyiv Post previously reported that Ukraine’s largest telecom company and mobile operator Kyivstar signed a memorandum that starts preparations for the company’s IPO on the Nasdaq stock exchange.

VEON the owner of Kyivstar, signed a memorandum of understanding with the American investment company Cohen Circle. The companies plan to merge their businesses to indirectly list Kyivstar’s shares on the Nasdaq stock exchange in the US.

Uklon is currently owned by its founders as follows: 38.46% each for Viktoriia and Dmytro Dubrovskyi, and 11.54% each for Smus and Dyatlenko, according to YouControl.

But even if they leave the company, they won’t be left with nothing. In June 2024, they launched Nezlamni, a fund for investing in defense startups, which had made five investments as of January, Forbes Ukraine reported.