How InDrive built a $1.2 billion business, starting with the VK (Russian Facebook) group in Yakutia (Russian Subarctic City)

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By The Captain

The challenge to launch 12 projects in 12 months. The goal is: $1 million from a meaningful project.

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Let's look at how the service turned from a small Yakut social network group for ordering a taxi into an international company worth $1.2 billion.

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When you raised $1.2 Billion on a public page on a social network.

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Let’s go find out:

In 2021, InDrive’s valuation stood at $1.2 billion. How did InDrive manage to outperform Uber in many markets, despite entering the international arena much later?

In previous articles, I’ve shared a three-part formula for launching a successful IT venture:

🦄 “Steal like an artist”: Instead of searching for an original idea, replicate a business model that already works.
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🦄 Focus: Don’t launch all your ideas at once. In the initial version, improve and launch just one feature.
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🦄 Launch in 1 month: Don’t tinker with something for 3 years in a garage, like a true-blue startup founder. Instead, release the first version in just one month.

If we analyse all successful businesses, only a small portion of them are pioneers. The majority adheres closely to this formula. They find working businesses, enhance a single feature, and swiftly launch a product with significantly lower risks than the original company.

“On a day when it was -45°C (-49° Fahrenheit) outside, local taxi drivers hiked their prices.“

(c) Arsen Tomsky, founder of InDrive

InDrive was founded by Arsen Tomsky in 2013 in Yakutsk. The app emerged from… a VK (Russian Social Network like Facebook) group!

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Arsen Tomsky, founder of InDrive. (Photo from Arsen Tomsky LinkedIn profile)

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Let’s try again: The guys started from a VK public group. And they built a billion-dollar company, almost catching up with Uber.

When the market demand was confirmed, the VK group with 60,000 members transformed into an application. Later, the app made its debut in other Russian cities. Starting in 2018, it began to expand into Latin America and Africa.

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Your AI blockchain startup VS InDrive, which started with a group on a social network.

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“Before we ventured onto the international stage, people told us that no latecomer had ever managed to dethrone the “Big Brother” from the number one spot. Nevertheless, within our first year of operation in several Latin American cities, we achieved exactly that.“

(c) Egor Fedorov, Chief Operating Officer of InDrive

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Today, the app operates in 48 countries and 655 cities.

InDrive’s key markets include Latin America, Asia, and Africa:

In 2022, the company increased its revenue by 88%, reaching 61.8 million downloads. This is only half the number achieved by the giant Uber.

In February, the company also secured a $150 million funding round from General Catalyst. The team intends to allocate these funds for expansion into new verticals. Over the past year, they have already diversified into delivery, cargo transportation, and on-demand labor services. Additionally, this summer, InDrive entered the U.S. market.

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The elements of that very formula are evident:

Instead of reinventing the wheel, they embraced a working idea.
InDrive acted wisely by entering an established mobile taxi market rather than attempting to create something entirely new from scratch. In contrast, Uber assumed all the risks of a pioneer.

Before 2009, people ordered taxis via phone calls. Uber, as a pioneer, was shaping a new reality. They undertook the most challenging task: selling the concept of booking rides through a phone and demonstrating its feasibility. They learned to navigate a myriad of legal obstacles, protect their drivers from taxi company displeasure, and much more.

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InDrive arrived when things were already set up. Users were accustomed to this format. Taxi drivers were somewhat reassured, and many countries legalized the online taxi industry.

For instance, they entered the Pakistani market in 2021 and swiftly approached the download numbers of Uber and other major applications, which had been building the market and expanding their driver base there for over five years.

Taxi services by download count in Pakistan.

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An example of InDrive’s entry into a specific market.

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They started with the simplest approach: a social network public group, rather than spending years developing a complex solution. When InDrive launched, the team didn’t spend millions creating their own platform; they began their journey with a VK public group.

“Experience taught me that if [the VK group’s] story develops without support and investments, such a business will take off,” said Arsen Tomsky.

This approach not only shortened their launch timeline but also saved on their budget, allowing them to focus on solving users’ key problems instead of developing everything from scratch.

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They didn’t try to do it all. They improved one feature.

At the outset, the team took a specific function and made it better: Users set their own prices for rides, and drivers either accepted them or made counteroffers. Typically, this was more convenient and profitable for both parties.

"We chose a model where people communicate directly and offer prices. The VKontakte public model became part of our ideology," explained Arsen Tomsky.

As a result, they managed to achieve something invaluable in the industry: lowering the commission. While Uber takes more than 25% of passenger payments, InDrive’s average commission worldwide is 9.5%.

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In summary

"The madmen pave the way, and the prudent follows." (c) Fyodor Dostoevsky

When Yakutsk students created a VK group to find affordable taxis in 2013, few could have predicted that it would turn into the world’s second-largest ride-sharing service and the fastest-growing app in terms of installations a decade later.

The bottom line: the company is valued at $1.23 billion.

But most importantly, the founders of InDrive faced significantly fewer risks than Uber.

We often forget about risks 🤷♀ because it usually goes like this:

1. You get an idea. Examples of other successes excite your imagination.
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2. You forget about the survivorship bias. And you start working on something for 3 years.
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3. You find out that nobody needs it.

In short, becoming Uber requires too many stars to align.

It's much less risky to become InDrive. Find an established market. Improve one key feature. Swiftly launch a simple solution. Eventually, build a sizeable business with far fewer risks.

What do you think?

How do you like this launch formula? I invite you to discuss it in the comments.

I love this strategy so much that we organised an IT reality show in this Telegram channel: 12 launches in 12 months. There, we launch IT projects using the following scheme: find a large market, simplify the competition, launch in 1 month. And we see what happens.

In the channel, I report on progress, share all metrics, achievements, and even failures, which happen from time to time. Subscribe, it’s getting hot in there! 🔥

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