Taxi Driver Online

Uber rival Karhoo battles to avoid crashing into administration

A high-profile taxi-booking app is engaged in a race for new cash as it fights to stave off bankruptcy, Sky News can reveal.

A taxi booking app which claims to have raised hundreds of millions of dollars and boasted just two months ago that it was bigger than Uber in the UK is on the brink of crashing into administration amid a frantic search for new investment.

Karhoo's financial travails come amid frenzied competition in the market for booking private car journeys on mobile phones and other digital devices.

Uber has raised more money than any other start-up company in history, and is now valued at more than $65bn.

In Europe, Hailo is merging with MyTaxi following a major investment from Daimler, the German owner of Mercedes-Benz, as taxi-booking apps seek greater scale to compete.

It was unclear how much additional funding Karhoo requires to have a viable future.

In the staff memo sent on Monday, Karhoo employees were informed that work was underway to secure new investment but were not told the identity of the potential new backer.

"The key discussion points have been around providing him with reassurances about the state of the business, as he is being asked to invest money today with no due diligence done," the memo said.
 
"The result of these discussions is a term-sheet received overnight, outlining the terms under which the investor is willing to take over Karhoo and fund it to break even. 

"While there are still some items which need to be negotiated, the terms are very close to being acceptable." 

The memo said that members of Karhoo's management had committed $600,000 to the prospective transaction in order to demonstrate their confidence in the business.

"Unfortunately, while we made good progress on closing a transaction, a new hoop was thrown in the way. 

"Yesterday, as a result of lack funding, the directors of the Israeli R&D centre had no choice but to put all employees there on notice of termination. 

"We have been working hard since to put the team back together, as it is clearly a deal breaker for the investor."

The directors conceded that the events of the last week had "started to leave scars on Karhoo".

"We understand that patience is wearing thin. 

"Today we will all have a final answer: if we can put the R&D centre back in shape, and negotiate the last points of the term-sheet, we will have a business tomorrow. 

"If not, the board will have tonight to call for closing the business."

A Karhoo spokesman declined to comment on Monday night.

source: http://news.sky.com/story/uber-rival-ka ... n-10649492

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Think of how stupid the average person is, and realize half of them are stupider than that.
George Carlin

Interesting as karhoo i believe take 10 percent not 25 like uber

and give out loads of free sweets at trade shows

so they take less in and give more away but if they are doing so well they should at least be able to cover day to day op costs ?

or was it all PR Bull

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

I smell PR bull like you.

and I bet Uber executives are popping the champagne corks as we type

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

well now its renault bull

Uber rival Karhoo back from the dead thanks to Renault

Make no mistake, it's hard going up against Uber. Traditional taxi companies have been forced to evolve or die, while other startups like Hailo have found it difficult to compete the ride-hailing service's incredible growth. Karhoo, a price comparison service for hailing black cabs and the like, also found this out the hard way.

Despite raising tens of millions of pounds and enjoying a splashy launch last May, the company quickly burned through its investment and closed in November as it looked "at the next steps for the business." Administrators got involved and employees suddenly found themselves without a job. However, two months later, Karhoo is making a return, thanks to the financial arm of French car giant Renault.

In a statement, RCI Bank and Services confirmed that it had taken a majority holding in Flit Technologies Ltd, a company formed by former Karhoo employees that bought the remaining assets of the liquidated company.

"The acquisition of the start-up Karhoo appeared as a sudden opportunity that we did not want to miss and the acquisition was completed rapidly," said Gianluca De Ficchy, CEO of RCI Bank and Services. "We have met the highly-motivated teams, and I have every confidence in Karhoo's business model; it is innovative and underpinned by a first-class technological platform. We will also be able to capitalize on this platform as part of our activities for the Alliance brands."

Renault becomes the latest car maker to sink money into on-demand transport. Daimler owns the majority of Hailo, Volkswagen has poured $300 million into Gett and General Motors has invested $500 million into Lyft. Karhoo operates a little differently to many of its rivals in that it doesn't operate its own cars, it simply provides a platform for taxi and private hire firms to feed ride pricing into its app, allowing users to choose the provider that suits their needs.

Before the company shut down last year, Karhoo employees Boris Pilichowski and Nicolas Andine ran operations following the departure of founder Daniel Ishag. Pilichowski and Andine have become co-CEOs of the new entity and hope to relaunch the service, which is based in London but also has operations in New York, later this year.

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lack of modern legislation is the iceberg sinking the titanic of the transport sector