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Uber rival Gett said to mull sale of ride-share startup
GETT Inc, the ride-hailing app that competes with Uber Technologies Inc, is weighing an exit from the United States, just over a year after spending US$200 million to enter the market.
The Israeli tech company may sell Juno, the New York-based startup that it bought in April 2017, people familiar with the deliberations said, who asked not to be named discussing private information. Juno represents the bulk of Gett's US operations.
There is no guarantee that Gett will sell Juno, the sources said, adding that alternative options are still being considered.
The reason for the withdrawal stems from a struggle to contain rising costs at Juno, the sources said. However, a person with direct knowledge of the company said that Juno made a profit in the first quarter of 2018, and that Gett aims to be profitable in the first quarter of 2019.
The retreat from the US would be an about-face in Gett's attempt to bolster its chances against the world's largest ride-sharing platform. Juno operates only in New York, competing with Uber, Lyft Inc and Via Transportation Inc, and previously had plans to expand into other US cities.
Gett, whose investors include Volkswagen AG, started to consider plans to exit the US after muted interest during a recent funding round, the sources said.
Gett raised US$80 million last month, well below the US$500 million that the company was seeking just a few months before. Outside the US, Gett is focused on Russia, where it competes with the combined operations of Uber and local provider Yandex NV. It is also available in the UK and in its home market of Israel. Its investors include billionaire Len Blavatnik's Access Industries Inc and Swedish fund manager Vostok Nafta Investment Ltd.
Once seen as a viable challenger to Uber and Lyft in New York, Gett attracted more than US$300 million from Volkswagen in 2016. Since then, the German carmaker has changed focus to funnel resources into its home-grown mobility unit called Moia and other operations.
Gett, which currently operates in more 100 cities, would not be the first to scale back plans for global expansion. DiDi Chuxing Inc muscled Uber out of China, as Grab Holdings Inc did the same for South-east Asia. BLOOMBERG