Wednesday, May 25, 2016

Volkswagen is making a $300 million bet on Gett

  Shahar Waiser, cofounder and CEO of Gett.


Volkswagen is making a $300 million strategic investment into taxi app Gett, the startup announced on Tuesday.

The auto giant’s minority investment comes as it attempts to move beyond a huge corporate crisis over emissions, and launches a new mobility unit focused on new technology.

VW “want to go beyond vehicle ownership,” Gett CEO Shahar Waiser told Business Insider in a telephone interview.

Gett, an Israeli startup that launched in 2010, works in a similar way to rival Uber: Users can use an app to simply hail a taxi.

The company is not profitable overall, Waiser said — although it is in some early markets. It has annual revenues of $500 million. It has previously raised $220 million in venture capital — with VW’s $300 million taking the total up to $520 million. Waiser declined to comment on Gett’s valuation.

It currently operates in 60 European cities, as well as New York. The new funding will help accelerate expansion on the continent, Gett says.

Waiser also said that Gett’s technology — big data, predictive algorithms, and so on — could prove useful in the development of self-driving vehicles, but stressed that neither Gett is not currently developing autonomous vehicle technology.

Drivers who use Gett can stand to benefit from the deal: They will be offered terms on Volkswagen vehicles that are better than market rates, Waiser says. This, in turn, could make the platform more attractive to potential drivers looking to get into the ride-hailing business.

The investment is also likely to some extent a necessity, as ride-hailing companies raise increasingly huge war chests in their battle for dominance. Uber has raised billions. And Didi Chuxing, a Chinese ride-hailing company, recently received a rare $1 billion investment from Apple.

VW isn’t the first legacy auto company to invest in the ride-hailing business. Back in January, General Motors sank half a billion dollars into Lyft, at a valuation of $5.5 billion (and as part of a larger $1 billion Series F funding round).

Source : Business Insider.

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