Hailo, a European mobile taxi network, is announcing a $17 million round of Series A financing led by Accel Partners. The company previously raised $3 million in seed funding from Wellington Partners and Atomico, who both participated in this round as well.
Hailo, which has been operating in London since last year, is a mobile network that matches passengers and licensed taxi drivers (a differentiation from Uber, which uses private black cars). Here’s how it works (check out the video below as well). The Hailo Driver Network can be accessed via iPhone or Android apps is designed to be a taxi driver’s companion and offers social features, advanced, private stats, sharing of traffic and demand events relevant to drivers. These apps also allow drivers to accept credit cards as well, and includes a tipping functionality.
The network aspect of the app allows drivers to access traffic patterns and problems, messages about where pickups are light or heavy, airport information and more. Along with this information, Hailo also offers an interface that will show drivers where pickups are ordered (through the Hailo consumer app), and will allow drivers to process these pickups seamlessly. Additionally, drivers can use the app for credit card processing for pickups unrelated to Hailo.
On the consumer side of things, Hailo’s iPhone and Android apps allow you to order a licensed cab in a similar way you order a car with Uber. Once you open the app, Hailo will detect your location on a map and you can adjust where you’d like to be picked up. The app will tell you how close the nearest drivers are to your location, and you can then request a pickup. When the driver is nearing arrival, the app will alert you of the arrival. You can also see a profile of the driver, his or her ratings and more.
In terms of payments, you are charged based on what the taxi’s meter reads for the trip. With Hailo, you enter your credit card information once and the app will always use this information for payments without having to renter the details for each ride. Via the app you can choose to add a tip, as well as choose to pay via cash. A receipt will be emailed to you and you can rate the driver.
Hailo has been downloaded nearly 200,000 times by consumers in London and over 3,200 taxi drivers have already downloaded the app since its launch last November. In London, the startup says its average pickup time is around two minutes, and the app has around 1,700 taxi drivers as active users.
As explained to me by CEO Jay Bregman, Hailo, which was co-founded by three London cab drivers and three technology entrepreneurs, is working on making the app appealing to both drivers and consumers. By offering a network that includes traffic, pickup, and other info, the startup is actually making Hailo useful to taxi drivers beyond just providing pickups. Bregman tells me, “We don’t look at this as a transactional booking app. We are building an app that helps solve the fundamental pain points of being a driver.”
The company also enlists drivers as the managers of operations in its cities. In London, Hailo is managed by three drivers, and in the startup’s next stop, Dublin, current drivers will also help set up operations.
It’s important to note that Hailo can work with any taxi company since it simply sits on top of the meter—drivers manually input whatever the meter’s amount is into the app for charges to go through. This enables drivers who don’t pickup fares via the Hailo app to input a charge manually through the app for a credit card payment. Hailo makes money by taking a percentage of each fare that is processed via its consumer pickup app.
With $17 million in new funding in-hand, the startup is setting its sights on the U.S., looking to launch in Chicago, Boston, Washington D.C. and even New York. Although Bregman acknowledges that new York is a more challenging city to enter because of the heavy regulation of the taxi industry in the city.
And the company, explains Bregman, is not trying to provide taxi drivers with a full day’s worth of work. Hailo wants to simply account for 10-20 percent of order volume and provide orders in downtime. He feels that taxi cab companies will be responsive to this because drivers will be more productive.
Accel partner Adam Valkin tells me, “This is a massive market and a market that is inefficient. Passengers are frustrated and drivers aren’t making enough money. The smartphone is the tipping point.” He adds that Hailo has thought carefully about the internationalization of the app and feels that the startup has a clear strategy for becoming a global leader in the space. Valkin, who is based in Accel’s London office, will join the Hailo Board, and Palo Alto partner Sameer Gandhi will join the Board as an observer.
While Hailo has major ambitions of entering the U.S., the startup will certainly face competition from some of the more established and popular players. Uber has been exploding in growth, and armed with $32 million of new funding, the company also has its eyes on London. TaxiMagic also offers an online taxi booking app in the U.S. And GetTaxi is expanding in Europe.
Bur Bregman is confident that the model that has proven to be successful in London can be scaled quickly in the U.S. and even Canada. Already, Hailo has hired a Chicago general manager and is looking to quickly expand in the coming months.