Arkady Volozh: Founder of Yandex's legacy is at threat due to Ukraine war

Arkady Volozh has been hailed as a visionary leader in the tech industry and spent 20 years building Russia’s tech giant, Yandex. The Ukraine war threatens his achievement. Jane Lewis reports.

It took Arkady Volozh 20 years to build Yandex into Russia’s Google, Uber, Spotify and Amazon combined, says Wired – and just 20 days for “everything to crumble”. The country’s preeminent tech giant has been so stricken by the Ukraine war that there are doubts about its survival – at least in its current form.

Western sanctions have led to Yandex’s shares being frozen on US stock exchanges, which in turn has led shareholders to seek repayment on convertible note guarantees, reports Radio Free Europe. The company says it doesn’t have the $1.25bn to cover the sum. The now untradable stock is down nearly 80% since November, wiping off more than $20bn in market value. Big-name Western partners are deserting in droves.

A Russian miracle

Founded as a search engine in 1997, Yandex has spent years cultivating an image that it was far enough removed from the Kremlin to be considered a secure investment, says the Financial Times. It succeeded well enough to be viewed as “a Russian miracle” in Western tech circles.

But now Volozh’s hopes of becoming “a significant player on the global tech stage” have been smashed. There are also growing worries about its position at home, says Bloomberg. Russia’s “omnipresent tech company” is “facing a looming shortage of hardware” as US sanctions bite. According to sources, it may run short of semiconductors to power its servers in a year to 18 months’ time. By general consensus, the disaster couldn’t have happened to a nicer chap, says Wired. Arkady, as everyone in Yandex calls him, comes across as “the opposite of the stereotypically boastful, political knife-fighting Russian oligarch”. Indeed, he’s described as “self-effacing, cerebral, respectful”. The US angel investor and former Yandex board member Esther a business magnate”. Others consider him a visionary leader. He also clearly has skills in diplomacy – mastering the “high-wire act” of running an independent business while remaining on the right side of the Kremlin.

Born in 1964 to a Jewish family in the capital of Soviet Kazakhstan, Volozh’s father was an oil geologist and his mother a music teacher. As a child he was something of prodigy and attended a special school for students gifted in mathematics, where he formed a close relationship with “an equally precocious youngster”, Ilya Segalovich.

The pair headed to Moscow for college and after graduation started a series of small IT companies in the 1990s, “tinkering” with “the possible but unproven commercial potential of the internet”. Volozh likes to boast that their first search engine went live in September 1997, almost a year before Google. By 2009, it had a 56% share of the Russian-language market. Two years later, when Yandex floated on Nasdaq raising $1.3bn, it was hailed as the start of a new era.

Tiptoeing westward

Segalovich, who was openly antiKremlin, died in 2013, leaving Volozh running Yandex alone in an “increasingly nationalistic” climate. But lately Volozh had begun “tiptoeing westward” in a bid to make the firm “less reliant on its Russian business – and on the whims of Vladimir Putin”.

Yandex formed a joint venture with Uber and launched delivery services in London and Paris. But its most showy project is a Michigan-based selfdriving car trial launched in partnership with Grubhub. Volozh has long lived in Israel. He may now form the focus of a senior staff exodus, says The Times of Israel.

A Reuters report this week suggests that Yandex’s CEO Elena Bullina has resigned and left Russia for Israel. “I cannot work in a country that is at war with its neighbours,” she wrote. The company’s fate now hangs in the air, its former champion Esther Dyson told Radio Free Europe. “The future of Yandex depends on the future of Russia.”

Recommended

What to do as the age of cheap money and overpriced equities ends
Investment strategy

What to do as the age of cheap money and overpriced equities ends

The age of cheap money, overpriced equities and negative interest rates is over. The great bond bull market is over. All this means you will be losin…
29 Sep 2022
These 3 top value stocks offer
Share tips

These 3 top value stocks offer

Professional investor Adam Rackley of Cape Wrath Capital highlights three overlooked value stocks to buy.
29 Sep 2022
Why everyone is over-reacting to the mini-Budget
Budget

Why everyone is over-reacting to the mini-Budget

Most analyses of the chancellor’s mini-Budget speech have failed to grasp its purpose and significance, says Max King
29 Sep 2022
Bank of England spends £65bn to “restore orderly market conditions”
Budget

Bank of England spends £65bn to “restore orderly market conditions”

The Bank of England has said it will spend £65bn buying bonds to stabilise the financial markets after the government’s mini-Budget. Saloni Sardana ex…
29 Sep 2022

Most Popular

Earn 4.1% from the best savings accounts
Savings

Earn 4.1% from the best savings accounts

With inflation topping 10%, your savings won't keep pace with the rising cost of living. But you can at least slow the rate at which your money is los…
27 Sep 2022
How the end of cheap money could spark a house price crash
House prices

How the end of cheap money could spark a house price crash

Rock bottom interest rates drove property prices to unaffordable levels. But with rates set to climb and cheap money off the table, we could see house…
28 Sep 2022
What changes to the pensions charge cap mean for you
Pensions

What changes to the pensions charge cap mean for you

The government could raise the pensions charge cap – the amount you can be charged in your workplace's default pension fund. Saloni Sardana explains w…
27 Sep 2022