With $100M in Sales, Taxi Hailing App Hailo Adds $30.6M & Prepares for NYC Launch

Today UK-based taxi hailing app Hailo announced that it has added $30.6 million in Series B funding, led by NYC-based Union Square Ventures, with participation from Phenomen Ventures, Felicis Ventures, Red Swan Ventures, Virgin Group’s Sir Richard Branson, Japanese telecommunications company KDDI, and several of the company’s existing investors. The funding was first reported by AllThingsD in December, though only confirmed by the company today.

Hailo’s iPhone and Android apps lets users hail a taxi using their smartphone, tracking the drivers as they arrive and paying automatically via the app. The company is often compared to another tech-savvy transportation startup, Uber, and in a bid to compete with their rival the company also announced today that it has added Starbucks’ former Head of Coffee Business Tom Barr as the new president and COO of its U.S. operations.

This funding round comes after a $17 million round in early 2012, and brings its total funding to over $50 million. BetaKit covered Hailo in September 2012 when the company launched in Toronto, after already building a presence in London and Dublin, and since then the service has launched in Boston and Chicago. The company plans to launch in cities including Barcelona and Tokyo this year, with a NYC launch expected next month (they’re currently awaiting approval from the Taxi and Limousine Commission). Co-founder and CEO Jay Bregman said sales over the last year have totalled over $100 million, and Hailo cabs have carried over 2.5 million passengers.

“We view this technology as inevitable. The benefits that it brings to passengers, and to drivers, are such that it’s just impossible to ignore the upside. What I think people have been concerned about is potential downsides, but none of those have come true,” Bregman said in an interview.

The company doesn’t partner with local taxi companies to integrate with their fleets, instead partnering with local taxi drivers (Bregman said at least a percentage of drivers in every launch city are independent). Drivers use the Hailo Driver app to receive requests, and the company takes 15 percent of each drivers’ fare. In September there were 450 Hailo-supported drivers in Toronto, and at the time the company said they expected that to hit 2,000 after a few months (the company said today they have signed up just under 1,000). At the time it also reported that it had 7,000 drivers in London, and that number has now grown to over 10,000 drivers, with tens of thousands of drivers around the world.

The company’s investment from Japanese telco KDDI also involves a partnership, so when the company launches in Tokyo later this year they will leverage the company’s 35 million wireless subscribers. The company was also reportedly working on a partnership with Canadian wireless provider Telus when it launched in Toronto to provide custom plans for taxi drivers, though no official announcement has been made. Bregman said they’ll continue to work on partnerships this year.

Bregman said they’ll be using the funding to build out their commerce network, and to figure out what else they can offer users beyond just taxi rides. “We’re thinking about the other types of products and services that we could layer on top of that, and still respect the core experience that we’re providing,” he said.

Right now competitor Uber is active in more cities than Hailo, 30 at latest count, including Los Angeles, San Francisco, and Sydney. Uber has famously faced several regulatory hurdles since launching in San Francisco, most recently winning the right to operate in Washington, D.C. in December. Hailo also competes with Flywheel and other on-demand taxi apps, as well as local taxi fleets, with the Toronto Star reporting on the local taxi war after Toronto’s Beck Taxi was accused of threatening to discipline drivers who were using Hailo.

The company’s success will likely depend on how fast it can expand to new markets, and the partnerships it forms with telcos and others who can get its apps in front of drivers and consumers. The company now has the funding and executive team needed to make a splash in the U.S., and its launch in cab-crazy NYC should be telling in terms of how other U.S. cities will adopt it. With the e-hailing wars just heating up, Hailo is putting a stake in the ground, so it will be interesting to see how Uber responds over the next few months.

 

 

Erin Bury

Erin Bury

Erin has covered startups and technology for over three years in publications including Sprouter Weekly, The Globe and Mail, Business Insider, Mashable, and VentureBeat. She also writes a regular startup column for the Financial Post, and is a technology expert on CTV News Channel. Before BetaKit Erin worked as Director of Content & Communications at Sprouter from its launch in 2009 until its acquisition by Postmedia Network Inc. She was recently named one of Marketing Magazine's 30 Under 30 in 2012.

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