Russia Comes for Money: Yandex Schedules IPO for 2009

Last week we published a post about Yandex, one of the most successful Russian internet businesses. The post was based on an interview with Yandex’ co-founder published in Times of London. The article described numerous successes of the search engine in Russia and the company’s plans for expansion: and the expansion means opening an office in San Francisco, hiring a former Yahoo vice president and announcing plans for IPO. Namely, the article read:

“This autumn Yandex is planning to float on the Nasdaq exchange. A group of western investment funds that in 2000 gave the company some £2.5m is expected to sell about £700m worth of shares.”

All of that was very optimistic but there was one thing I was very uncomfortable about: the IPO scheduled for this fall given the current political situation. Honestly, I have had serious doubts about wisdom of the decision to go public now that numerous foreign investors pull their money from Russian companies. I could not help but think Yandex will not see a successful IPO if it is scheduled for this year - after all, I don’t think Russian-Georgian conflict along with all the international grudge around it will subside in the nearest couple of months.

I was uncomfortable about it but I actually hoped the guys over at Yandex would be able to admit this fall was not exactly the right time for an IPO - especially one intended to bring such huge funds to the company (and that is over 1.25 billion dollars) and would change the plans. And while I know that Russian market is prospering and the rate of growth of the number of internet users in Russia is much higher than in any other country in Europe, it is still wise to take international background into account when making such important business decisions.

To my relief, I have just found out that Yandex management has decided to postpone the IPO until some time next year. This has been reported by a press conference help by one of the leading Russian investment fund known for its multiple investments in IT companies. Valuation of Yandex as a result of the NASDAQ IPO is supposed to reach the level between $3 billion and $5 billion.

I do hope that by next year (especially since there is no information exactly when “next year” Yandex will go public) Russian companies will appeal to foreign investors again and the ambitious plans of Yandex and the company’s existing investors will actually come true.

Photo of Russian heavyweight boxer Nikolai Valuev by Igor Sakharov used under permission

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