French startup LeCab announced that it has raised $6.8 million (€5 million) in Series B funding. The company operates a black car service that is very reminiscent of Uber — but it works a bit differently and bets on premium services. It didn’t disclose who invested in this traditional equity round as there is a non-disclosure agreement.
“All I can say is that they all have a similar profile,” founder and CEO Benjamin Cardoso told me in a phone interview. “They are 40-something French entrepreneurs who created their startups around 10 years ago,” he continued.
Many usual suspects fit the bill. For example, Meetic founder Marc Simoncini, Vente-privee founder Jacques-Antoine Granjon, Free founder Xavier Niel or PriceMinister founder Pierre Kosciusko-Morizet could be involved.
When it comes to so-called black car services, the French market is still wide open. Most services are only available in Paris and everything is very fragmented, with traditional cabs sill leading the way. Chauffeur-privé, SnapCar, Allocab, Voitures Jaunes, Uber and LeCab are all competing for the mindshare.
As this industry is a very capital-intensive one, the money will be used to expand LeCab’s services. Contrarily to Uber, LeCab isn’t a network that connects drivers with customers — it directly operates its Peugeot 508. It hires and trains the drivers. “We consider that we don’t have any real competitors,” Cardoso said.
After saying where you want to go, LeCab provides a fixed price that doesn’t vary with the traffic. The company knows where all of its drivers are and can redirect drivers in real time. Reliability is the key element to convince professional customers.
Every car comes with an iPad. This week or next week, the company plans to release an update for its iPad solution. Users will fine a complete infotainment solution to view the car on a map, access movies, newspapers and more directly from the backseat. The idea is to provide the same kind of system that you find on a plane.
The company wants to reach 350 cars before the end of the year, and a thousand cars next year. Moreover, LeCab plans to hire senior executives now that it has more cash. “We want to attract experts in their areas in order to bring LeCab to the next growth level,” Cardoso said.
For now, thousands of people use LeCab every day and the company has 70,000 active users (customers who ordered a LeCab over the past five months). Most of them use it more than once a month.
Previously, LeCab had raised $4.1 million (€3 million). But now is a good time for it to raise. In October, the French government said that black car services will have to wait 15 minutes before taking a customer as these new services would hurt traditional cab drivers. Nothing is set in stone yet.
“I think that there is a contradiction,” Cardoso said. “The government wants to support our business. At the same time, it wants to stay friendly with those people who are close to the government.”
(Photo credit: Maxime Bonzi)