Israeli taxi-hailing app Gett (formerly Get Taxi) announced Tuesday a $300 million investment by German car giant Volkswagen - making it one of the most successful Israeli startups in recent years. Since its founding in 2010, the company has raised $520 million and expanded its services to New York and London.
While the announcement did not explain the specifics of the massive investment, it is likely previous shareholders will see their relative holdings significantly diluted. Gett CMO Nahshon Davidai sat down with "Globes" for a special interview after the company’s big week.
"This is a very substantial investment, both in financial and strategic terms. It inaugurates a cooperation that will help strengthen our B2B activity where we are strong and they are too. Both companies are run in a disciplined manner financially, and both address growth with significance. We are a company that unlike others in our field is already profitable in our initial markets."
Initial includes Israel? And what about Germany, is there an intention to use Volkswagen to enter a market in which you are not present?
"We will expand in Europe, but we will name specifics only next week."
Explain how the cooperation between Volkswagen and Gett will play out.
"I cannot delve into specifics right now because next week we will hold most likely in Germany a joint press conference in which we will explain; but the cooperation will likely be expressed in two directions: the automaker to us by offering packages to drivers and vehicles and the other way, for example, if Volkswagen sells vehicles to a business, we can enter the deal and offer fleet management services."
Looking ahead, this cooperation between you may expand beyond ride-hailing.
"Our basic product is taxi service, but yes, in the distant future we intend to grow beyond this area."
Gett claimed in its announcement and on its homepage that it will reach revenue of half a billion dollars this year. But when we asked Davidai about the figure, he almost hesitated.
"We claim a ‘run rate’ of $500 million, going by the definition."
Still, it remains unclear whether Gett is touting its revenue or its net income. Uber, for example, reportedly generated revenue of $10 billion but only $2 billion in net income and many analysts believe the actual figure to be much lower.
What does the ‘run rate’ mean in your terms?
"I’d rather not get into that any more than we already have."
Uber, to which the comparisons are inevitable, is currently valued at $62 billion. What does that say about your valuation? Are you under-priced or is Uber over-priced?
"I see where you’re going, but we aren’t talking about valuations right now. Not at all."
One way or another, the Volkswagen investment in Gett is part of a growing trend in which automakers and global tech companies are dipping into the On Demand Mobility Services arena. Volkswagen is the second-largest vehicle manufacturer in the world, after General Motors and Toyota, who share the top spot. The company, with a market cap of $76 billion in Germany, owns a bevy of brands including Audi, Bentley, Lamborghini, and Skoda.
Gett plans to use the newly-available investment to fund its expansion in Europe and the US. Beyond Israel, it is currently active in the US, Russia, and the UK.
Published by Globes [online], Israel business news - www.globes-online.com - on May 26, 2016
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