Some more movement and consolidation is afoot in the on-demand transportation industry, specifically in Europe. Today, Hailo is announcing that it has sold 60% of its company to Mercedes-Benz owner Daimler, and Hailo will merge its and rebrand its operations under MyTaxi, another on-demand ride-sharing company that was acquired by Daimler subsidiary Moovel in 2014 as part of a larger move into the space by the carmaker, and for the merged companies to better take on larger players like Uber, which has been aggressive in its European expansion.
Sky reported last night that there was a deal in the works between the two companies.
As part of the deal, Andrew Pinnington, the current CEO of Hailo, will become the CEO of MyTaxi, while Niclaus Mewes, the co-founder of MyTaxi parent Intelligent Apps, will become an MD at Daimler overseeing the carmaker’s wider efforts in the transportation industry. The company earlier this month also acquired an auto leasing company, Athlon Car Lease, for $1.8 billion, and in its last quarterly earnings it also announced more commitments to investing in electric and autonomous driving tech. This is part of a wider trend that has touched several other carmakers, such as Toyota (invested in Uber), GM (invested in Lyft) and VW (invested in Gett).
To be clear this is an on-paper deal only, meaning there is no cash being exchanged as such and no new valuation for Hailo.
The company to date has raised $100 million, and Pinnington told me that he had been trying to raise more money when one of his current investors — they include Accel, Atomico, Japan’s KDDI, Union Square and Wellington — was approached by one of MyTaxi’s bankers about a potential merger.
“Both of us were out looking for funding,” he said in an interview, “and even though they are 100% owned by Daimler they are keen to have other investors and they were knocking on doors looking for further funding.
“What’s starting to happen in this industry is that you are starting to see the emergence of regional winners and funding is starting to happen to those whether they are Ola or Grab or Lyft, and while our plan and targets resonated with investment community, we were both going to them with the same story, which is we both wanted to be Europe number one.”
The companies have very little overlap at the moment, he pointed out, with Spain being the only notable exception. Otherwise, MyTaxi is in Germany, Australia, Italy, Poland, Portugal and Sweden, while Hailo is strongest in the UK and Ireland. “We think we’ll create the clear number one in Europe by putting our businesses together,” he said.
As part of this, he also added that Hailo would be “gradually winding down” everything but a small operations team in its UK HQ in London, with all R&D moving over to Germany and MyTaxi, as that will be the common platform that will be used across the merged company.
There are around 75 people working in the UK office today, and that will come down to about 20, he said.
Below is an interview I had with Pinnington at the end of last year on the challenges of scaling and competing against Uber and others in the transportation market in Europe.
More to come.