News Column

GetTaxi sets sights on corporate customers

August 14, 2014

By Roy Goldenberg, Tzahi Hoffman and Globes Correspondent, Globes, Tel Aviv, Israel

Aug. 14--In Vostok Nafta Investment Ltd.'s statement that it had invested $25 million in GetTaxi, as part of the taxi-haling app company's latest $150 million financing round, the Swedish investors highlighted the Israeli company's operations in the corporate sector.

Vostok Nafta said, "In contrast to its most famous competitor, Uber, it offers not only a business-to-consumer product but also a business-to-business product. Although currently smaller in terms of revenues at GetTaxi today the corporate market offers higher profitability and also immense growth opportunities as competition is lower. Also in contrast to Uber, GetTaxi deals solely with regulated taxis, making it less confrontational with incumbent solutions."

In a "Globes" interview, GetTaxi CFO Tal Brenner commented on his company's business product, saying, "In Israel, we have a complete business product, and we serve 1,500 business customers here. The business product is composed of both an app and a web interface and the customer service that supports it. We're also working on this product now in the UK and Russia."

Vostok Nafta observed, "Nearly half of the Fortune 500 companies use GetTaxi today. This is a predominately emerging market marketplace opportunity with the benefits of the high barriers to entry that marketplaces can give with the resulting high margins and added to this the growth of emerging markets. The addressable market for the company within its existing markets is some $30 billion. Of this GetTaxi's revenues are typically some 15-30% depending on whether it is servicing a private or business client. Strong EBITDA margins and cohorts make the upside potential of this very large. The main risk is execution, making the management team very important."

Brenner did not agree to answer one of the most intriguing questions: at what value did the GetTaxi financing round take place? "Unfortunately, we're not yet disclosing the value, but we'll publish it in the coming days," he added. "We're satisfied with the value for this round; it's one of GetTaxi's milestones around the world."

"Globes": Did any of the investors in the company take advantage of the current round to sell some his holdings?

Brenner: "No one sold anything in this round. All of the current shareholders are very satisfied with their investment in the company. They told me so several times, and it's a fact that they're investing again and again, including in this round. All the money we raised in going into the company."

Will the financing round enable the employees to exercise their options?

"The employees can't exercise their options yet, but it will certainly increase the value of their options." GetTaxi has 200 employees, not including the cab drivers, who are not company employees.

An exit? Not appropriate

It is not yet clear how close the current financing round has brought the company to a possible exit. GetTaxi will probably not have to raise money from the public in the near future, and in any case, it is reasonable to assume that it will not do so before Uber makes a move towards Wall Street. In a "Globes" interview five months ago, CEO Shahar Waiser referred to this possibility, saying, "Any company that has a large market, is making hundreds of millions in profits, and is growing by leaps and bounds will always be a candidate for becoming a public company."

He also addressed the possibility of an exit, saying, "Every business owner has to worry about just one thing: making his business healthy. As soon as it's growing and earning a lot of money, he has a lot of alternatives. It can be a private company, a public company, or an exit. To think about this now would be irresponsible, but we have to make sure that the business is impressive. Today, the business is growing by 400-500% a year. We're paying our drivers millions every month, and as long as we're growing, the company has the potential to be anything. To talk about an exit now seem inappropriate to me."


(c)2014 the Globes (Tel Aviv, Israel)

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Source: Globes (Tel Aviv)

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