The competitive landscape for transportation apps has become a little smaller today. Gett has announced that it has acquired Juno, a rival in the New York market. Separately, Gett’s CEO and founder Dave Waiser has told TechCrunch in an interview that the price of the deal was $200 million, although the companies are not disclosing other terms such as whether the deal was in cash, shares or a combination of the two.
The news confirms our report from yesterday that the two companies were in advanced discussions for an acquisition, which we reported at the time could be for as much as $250 million.
Now we can give you more details:
— The deal will bring on all of Juno’s existing business, from its network of licensed drivers through to its employees and founding team of Talmon Marco, Igor Magazinik, Ofer Samocha and Sunny Marueli. The four of them will remain based in New York to lead the combined companies’ operations in the U.S., which for now are in New York only but with plans to expand to other markets, to complement Gett’s footprint in Europe covering 100 cities.
As we mentioned yesterday, combining the two companies will catapult Gett into a strong position to step up competition with Lyft to be the second-largest rides-on-demand service in the city after Uber.
— This will also likely mean that Gett — which raised $300 million from Volkswagen last year — will be raising another large round this year to fuel that growth.
“This current deal provides a really enormous opportunity for expansion, so we’ll be looking for more capital this year,” Waiser said. “VW has been really supportive and an amazing partner, so everything is open for both existing and new investors.” He added that in the last quarter, Gett grew 100 percent both in terms of rides completed and revenues. “I don’t suggest that every quarter is like that, but it’s important that we achieved that at scale. We are growing organically too.”
— Juno made a splash last year when it announced at launch that it would be building its service as one especially friendly to drivers, specifically in response and in contrast to Uber, which was already picking up a bad reputation for its practices. Among its perks, Juno would offer drivers shares (RSUs) in Juno to ensure that whatever course the company took, they would share in those fortunes.
We can confirm that for now those restricted stock units are being nulled as part of the acquisition, with those values being paid out in the form of initial account balances to each driver who had qualified for RSUs. But that is not the end of the story: Gett, similar to Juno, will propose “long term value sharing” with its drivers, and from what we understand it will be along similar lines as what Juno did, although the details have not been worked out yet.
Other terms with the drivers will also remain as before. Both companies had offered a commission of 10 percent to drivers — which they claim is the best in the industry — along with 100 percent of all tips and round-the-clock live support.
All in all, this is an interesting development, and for those who might have called game-over in transport-on-demand, the recent news around Uber’s trials and tribulations definitely points to windows of opportunity for those who can present something different and compelling to the two sides of this marketplace: drivers and passengers. It could turn out that scale is just one measure of success.