Is Russia’s Largest Tech Company Too Big to Fail?

Arkady Yurievich Volozh seemed to be in good spirits. It was February 11, his birthday, and the 58-year-old billionaire CEO and cofounder of Yandex, the Russian tech behemoth, was in the sort of open, engaging mood that could be called privetliviy, after the casual Russian word privet for hello. He was speaking from his car in Tel Aviv, bragging about his father—an oil geologist in his eighties who had “discovered” oil in Israel, Volozh said—as we chatted about my upcoming trip to Tel Aviv to interview him for this story.

For more than 20 years, Yandex has been known as “Russia’s Google”: It began as a search engine in 1997 and still has a 60 percent share of the Russian search market. But for the past decade, this tag has understated the company’s inescapable ubiquity in Russians’ daily life. Yandex Music is the country’s leader in paid music streaming, and Yandex Taxi is the top ride-hailing app. Millions of Russians use Yandex Navigator, Yandex Market, Yandex News, and Yoo Money (formerly Yandex Wallet) to get around, shop online, read, and spend money.

Volozh has only recently begun to make his company less reliant on its Russian business—and on the whims of President Vladimir Putin—by tiptoeing westward. Yandex Taxi formed a joint venture with Uber in 2017, and in 2020 Yandex began testing self-driving cars in Ann Arbor, Michigan. Last year, the Yandex Rover robot, something of a six-wheeled Igloo cooler, began delivering food via a partnership with Grubhub to college campuses in Arizona and Ohio, with plans to expand to 250 American campuses. Yandex had also launched delivery services in London and Paris. On the day of our call, Yandex had a $16 billion market capitalization on Nasdaq, and about 85 percent of all its shares were traded in the United States.

Most of Yandex’s 18,000 employees are still based at the company’s headquarters in Moscow. But Arkady, as everyone at Yandex calls him, Western-style, shorn of the formal Russian patronymic, now more or less lives with his family in Israel. For several years, Israel has been an R&D hub for new products, especially in the transport sector, which Yandex aimed to bring to markets in Europe, the United States, and the Middle East.

On our call, Volozh asked whether there was anything in particular I wanted to see during my visit—the old city of Jerusalem perhaps? I have seen that, I told him. My goal was to spend as much time as possible with the reigning baron of Russia’s tech sector, and to try out Yandex’s new products firsthand. Yandex had recently acquired an electric-scooter business in Israel. How about a scooter ride? I asked. Of course, he said.

Volozh had seemed to master the high-wire act that all Russian moguls with global ambitions attempt: to accommodate Kremlin pressure while enticing Kremlin-leery investors and partners in the West. Self-effacing, cerebral, respectful, a soft voice in the boardroom with a salt-and-cinnamon goatee, he “does not come across as a driven entrepreneur,” John Boynton, the American chair of Yandex’s board, told me. In short, he’s the opposite of the stereotypically boastful, political knife-fighting Russian oligarch. “He is more a techie than a business magnate,” says Esther Dyson, an American angel investor and until recently a Yandex board member. In a country that still depends heavily on oil and gas exports, Volozh has been an unyielding visionary for the tech industry, imagining future possibilities—from natural language search to autonomous vehicles—and believing in his beloved Russian “geek community” to build those technologies.

His bent was to keep Yandex out of immediate political matters. But that abruptly became impossible. On the morning of February 24, two days before my flight to Israel, I received a text from a Yandex PR official. “We are deeply sorry,” the person began, but “events, which are beyond our control, create a great deal of uncertainty.” My meeting with Volozh had been postponed, until the “situation allows.”

The situation was that, hours earlier, Putin had launched the military invasion of Ukraine. “Uncertainty” barely described the existential predicament that Volozh, Yandex, and everyone in Russian tech abruptly faced. I received the text shortly before the US stock markets opened; by noon the price of Yandex shares had more than halved. In the following days, Uber announced that its three executives on the board of Yandex Taxi were resigning immediately, and the transport minister of Lithuania asked Google and Apple to remove the taxi app from their platforms.