Yellow lights ahead for Hailo? We have heard, and now confirmed, that the London-based taxi-hailing startup that competes against the likes of Uber for on-demand car services is laying off staff. As part of a reorganization, 17 people, or about 11 percent of its staff of 150 people, were let go earlier this week — a move that the company’s CEO says is being made to focus more on sales and growing its business.
Separately, we have also learned that Hailo is in the process of raising another round of funding. In a market where car service apps Uber and Lyft are raising hundreds of millions of dollars, the numbers we’re hearing are pretty modest: $20 million on a valuation in the hundreds of millions of dollars.
“We don’t have any comment on that at the moment,” a spokesperson said in response to fundraising questions, but it did have this to say about the layoffs:
“Hailo has 150 staff globally of which 17 of our London employees on Monday were told that their roles were impacted,” reads a statement to TechCrunch from CEO Andrew Pinnington. “We’re very proud of the work we’ve completed over the past 18 months to re-architect our technical platform into a world-class and market-leading service. Many passengers and drivers are already benefitting from these new changes. As we shift more focus towards accelerating our business growth and operational delivery off the back of this platform, we now need to re-balance our engineering structure.”
While companies like Uber have raised the hackles of regulators and incumbent taxi companies around the world for its fast and loose approach to hiring and organising its drivers and competing aggressively on pricing to gain market share, Hailo — which was co-founded by ex cab drivers — has grown its business as a complement to the existing black- and yellow-cab market, providing a way for them to organise, schedule and take payment for the journeys they make.
Hailo — which is now live in five markets including the UK, Ireland, Japan, Singapore and Spain — says that the last quarter was “the strongest sales quarter in the company’s history, with double-digit month-on-month growth,” although it does not provide any specific numbers on users, revenues or other metrics.
More generally, though, the news of the layoffs and fundraise comes on the back of a tough six months of rebuilding for Hailo, which pulled out of North America in October 2014 after it found it too expensive to compete against the very highly capitalised Uber and Lyft, other car service apps, and not least the incumbent car service industry.
At the same time that Hailo retrenched, it laid off 40 people and then lost two CEOs, first co-founder Jay Bregman, who left at the same time as the startup turned away from North America and now runs a drone startup called Verifly. And then Tom Barr, who was based in the U.S. even as Hailo left the market. He stepped down as CEO in January when Pinnington took over.
This latest round would potentially be part of a Series D for Hailo. According to CrunchBase, the company has to date raised just over $100 million, with investors including Vectr Ventures, Forward Partners, KDDI Open Innovation Fund, Red Swan Ventures, Union Square Ventures, Felicis Ventures, Wellington Partners, Richard Branson, Phenomen Ventures, Atomico and Accel Partners.
As a point of comparison, Uber has raised $4.9 billion to date as it pushes into lots of different ways of building its transportation network. Lyft has raised $862.5 million, and GetTaxi (known as Gett in the U.S.) has raised around $200 million.