Russian search engine Yandex NV (Nasdaq: YNDX) has acquired KitLocate Ltd., which will turn the start-up's Herzliya office into its Israeli R&D center. KitLocate, founded in 2011, offers energy-saving geolocation technology for smartphone apps. No financial details were disclosed but the acquisition was believed to be for $15-20 million.
Yandex is one of the world's largest non-English search engines. It has a 66% market share in Russian home market, compared with 25% for Google Inc. (Nasdaq: GOOG).
"When we founded our company, we called it Webi, but when we began working, we discovered a strong need to know where the user is all the time," KitLocate founder and CEO Omri Moran told "Globes" today. "The problem was that smartphone batteries constantly ran out. We decided to solve this problem, and discovered during development that there was a large market for this, so we changed our name to KitLocate. We offer technology that allows apps to always know where the user is. We offer developers a development kit. Our code is embedded in the app and it calls the server."
KitLocate has eight employees and has raised $700,000. Its Israeli customers include Isracard Ltd. and parking payment app Pango, and an American customer is Caesars. "We have hundreds of thousands of dollars in revenue, but it would be problematic to say that we're profitable. If we hadn’t been acquired, we'd have to raise more money," said Moran.
Yandex is already familiar with the Israeli market. Last year, "Globes" reported that it was going to set up development activity in the country. Its biggest investment to date in Israel was in Face.com, which was later acquired by Facebook Inc. (Nasdaq: FB), partly because of it strategic ties with Yandex. Yandex business development managers are seeking possible acquisitions in Israel, and opened talks with KitLocate five months ago.
Published by Globes [online], Israel business news - www.globes-online.com - on March 18, 2014
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