Source : bloomberg.com
Gett Inc., a taxi-ordering application that competes with Uber Technologies Inc., raised $300 million in a strategic investment from German carmaker Volkswagen AG to fund its growth in Europe and New York City.
Gett, based in Tel Aviv, Israel, has offered rides for as low as $1 and expanded its services to include deliveries of goods. The company hired Wells Fargo & Co. to find investors for the round, people familiar with the mattersaid in February. Volkswagen’s contribution brings total funds raised by Gett to more than $520 million, the taxi service said Tuesday in an e-mailed statement.
Volkswagen made the investment as part of a push to boost digital offerings and move beyond its diesel-engine manipulation scandal. Mobility services promise strong growth prospects and earnings potential in coming years, VW said Tuesday in a statement.
“We aim to become a world leading mobility provider by 2025,” VW Chief Executive Officer Matthias Mueller said in the statement. “Within the framework of our future Strategy 2025, the partnership with Gett marks the first milestone for the Volkswagen Group on the road to providing integrated mobility solutions that spotlight our customers and their mobility needs.”
With operations in over 60 cities worldwide, including London, Moscow and New York, Gett is a major ride-hailing provider and services will be expanded further as part of the alliance with VW. Last month, it completed its bid to buy London’s Radio Taxis in a move that brought Gett’s car fleet in the city to 11,500, a number the company says amounts to half of all licensed taxis in the city.
“This is a terrific boost for us,” said Nahshon Davidai, Gett’s chief marketing officer. Gett’s revenue grew 300 percent in 2015 and is projected to reach $500 million globally this year, the company has said, while Uber generates about $1 billion annually. The partnership with Volkswagen gives Gett “access to geographies and markets in which we have strong overlap,” he added.
Expanding digital services in connected cars is a cornerstone of VW’s strategy through 2025, which will be presented in mid-June. More than 250 employees are developing the plan, which will comprise eight key initiatives across the group, Mueller said last week at an internal management meeting at the carmaker’s Wolfsburg, Germany, headquarters.
Volkswagen is not the first car manufacturer to get involved in the ride-hailing business. General Motors Co. bought a 9 percent stake in Lyft for $500 million in January and Apple Inc. made a $1 billion investment in China’s Didi this month.
Completion of the transaction is subject to merger control clearance by antitrust authorities.