Automakers are continuing to ramp up their holdings in the world of on-demand transportation services, and in the latest development, Germany’s Daimler is closing in on a deal to acquire Taxibeat, a profitable ride-hailing app based out of Athens, for a price of around €40 million ($43 million).
The deal — which would roll Taxibeat into the same Daimler division that includes MyTaxi and Hailo, was originally reported in the Greek-language financial publication Naftenporiki. Daimler, which also owns Mercedes Benz and a number of other brands, declined to comment for this story, but we have confirmed that the deal is progressing with sources close to the automaker. The acquisition sounds like it will close soon.
Taxibeat had raised under $7 million, according to Crunchbase, representing a good return for its investors, which include Hummingbird Ventures and Openfund.
Unlike some of the other services that connect riders with drivers in the back end before presenting you with your ride, Taxibeat’s app presents cars in a marketplace format, where you have the option to take a ride from a driver selected by Taxibeat, or select a driver based on user ratings and other factors like whether the car has WiFi.
Taxibeat is one example of a counter-theme in the world on-demand transportation.
While Uber has spent a lot of money expanding internationally and making itself nearly ubiquitous across the world’s cities (it’s now in 540 of them globally), there are a large number of competitors that have built businesses focusing on a much smaller number of markets, where they are giving Uber and other incumbents a run for their money.
Taxibeat, according to the report in the Greek newspaper, is seeing an annual growth rate of about 180%, has some 850,000 customers in Athens, and it is profitable.
That is on the back of Taxibeat being active only in two markets: its home market of Greece, where there are 7,000 drivers in Athens on its network, making it one of the leading providers in that city; and in Peru, where there are 15,000 drivers and 800,000 customers.
All the same, we’re also in a period of some consolidation in this area of tech, in part because there is an economy of scale involved in building these services out, and in order to expand a business, it’s not clear if any single pure-play ride hailing company would be able to raise anything like the multiple billions that Uber has now raised in funding (only Didi and Lyft come close, but even they are a far cry away).
There have been a lot of recent moves by car makers to step into ride-hailing services — made popular by the rise of companies like Uber — either by taking investments in these businesses or buying them outright.
This is part of a strategy to hedge their bets in a future where people may not own cars outright, but may instead rent cars when they need them, or just ride in cars operated by others. Earlier this month, Renault acquired another car service, Karhoo in the UK. Last year, VW invested $300 million in Gett, GM put $500 million in Lyft, and Ford acquired the Chariot shuttle service.
Daimler is actually one of the earlier movers on this front. It took its first stake in MyTaxi in early 2012. It eventually acquired it, and RideScout, in 2014. Last year, Daimler also took a majority stake in UK’s Hailo.
Some of these deals are about getting into a business as it is growing and before it becomes a potential rival — GM’s $500 million investment boosted Lyft’s valuation to $5.5 billion.
And some are aimed at getting a distressed asset at a low price with the aim of recapitalising, restructuring and hopefully making it into a viable business: Renault’s acquisition of London-based Karhoo was for only $1 million, plus a $15 million commitment for investment — purchasing the startup from its administrators when it couldn’t pay the bills after it ran out of VC money (documents shared with us by sources noted it had raised around $52 million, not the $250 million that was claimed).
We have also contacted Taxibeat with a request for comment and will update this story as we learn more.
H/T to readers David de Chambrier and Victoria Stathopoulou from Reload Greece.