Hailo announced it raised a new $30 million round of funding led by Union Square Ventures. Here's what that means.
As taxi-hailing-app maker Hailo attempts to tackle the crucial New York City market, it has investor Fred Wilson on its side.
The London start-up announced Tuesday that it finalized a December deal that raised $30.6 million led by Wilson's Union Square Ventures (think: Twitter, Tumblr, Kickstarter). British mogul Richard Branson and Japanese telecommunications company KDDI also chipped in for the round.
Wilson seems to have had his eye on Hailo for a while; last year Jay Bregman, the company's CEO and co-founder casually told me that Wilson had described Hailo as "Foursquare for taxis."
Reached on the phone Tuesday, Bregman laughed when I referenced that phrase. He explained that he'd met with Union Square Ventures twice in December. In the course of pitching his company, and explaining how it differs from other ride-hailing companies in the aggressive and growing space, Bregman said Wilson stopped him, by saying, "I got it, I got it," followed by that line: "It's Foursquare for taxis."
With this latest round of funding from Wilson, Hailo has raised almost exactly the same amount as fast-growing ride-hailing company Uber. Both have about $50 million total invested. But the new round reportedly values Hailo at roughly $140 million--half what Uber was valued at when it closed its last round a year ago. (Hailo operates its taxi-hailing technology in nine cities; Uber offers its taxi-hailing service in five, and its sedan-hailing in more than two dozen.)
Founded in 2010 by a group of four friends in London, Hailo has thrived there. It's reportedly used by more than 10,000 drivers and its app has been downloaded by 225,000 potential passengers. The company raised a series A round of financing last year from Accel Partners (backers of Facebook and Dropbox), Wellington Partners, and Atomico (a fund created by the Skype founders).
Bregman's first dive into entrepreneurship was in London, after he finished graduate school. He founded a logistics company and delivery-business called eCourier, which is recognizable due to its big purple vans.
"We developed some scheduling algorithms to boost the efficiency of the deliveries, and learned a lot of hard lessons about how to create an on-demand transportation marketplace," Bregman says.
But Bregman was born in New York--and couldn't be happier to be home. He's been working for months now out of Hailo's shared office space at WeWork in the Meatpacking District, and planning for the New York City launch of Hailo, slated for the middle of this month.
Uber is likely to start its taxi-hailing service about the same time. Both are part of a year-long pilot program established by New York City's taxi commission to allow digital dispatch of taxicabs. GetTaxi and Flywheel (the start-up formerly known as Cabulous) are other contenders that also provide technology to let passengers locate, secure, and pay for taxicab rides from smartphones.
Wilson noted on his blog that Hailo released data Tuesday, including the fact it has 5,000 cab drivers already signed up in New York.
In cities where cab fares are relatively expensive (say, Dublin and London), Hailo takes a percentage cut--usually roughly 10 percent--of the already-high fare. Here in the United States, however, Hailo plans to simply charge a "Hailo fee."
"It's like tipping the doorman at the hotel," Bregman says. "You know what you're going to pay when you open the app."
Bregman says he considers Hailo more of a benefit to taxicab drivers than to passengers. It's not only a payment platform and fare-finder for drivers, but also gives them maps--and a sort of social-network of other drivers, letting them share tips about locations in real-time.