Uber Rival Gett Is Said to Mull Sale of Ride-Share Startup Juno
The reason for the withdrawal stems from a struggle to contain rising costs at Juno.
(Bloomberg) -- Gett Inc., the ride-hailing app that competes with Uber Technologies Inc., is weighing an exit from the U.S., just over a year after spending $200 million to enter the market.
The Israeli tech company may sell Juno, the New York-based startup 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 U.S. operations.
There is no guarantee Gett will sell Juno, the people said, adding that alternative options are still being considered. "As a policy, we do not comment on M&A rumors," a Gett spokeswoman said.
The reason for the withdrawal stems from a struggle to contain rising costs at Juno, the people said. However, a person with direct knowledge of the company said 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 U.S. would be an about-face in Gett’s attempt to bolster its chances against the world’s largest ride-sharing platform. Juno only operates in New York, competing with Uber, Lyft Inc. and Via Transportation Inc., and previously had plans to expand into other U.S. cities.
Gett, whose investors include Volkswagen AG, started to consider plans to exit the U.S. after muted interest during a recent funding round, the people said. Gett raised $80 million last month, well below the $500 million the company was seeking just a few months before.
Outside the U.S., Gett is focused on Russia, where it competes with the combined operations of Uber and local provider Yandex NV. It’s also available in the U.K. 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.
Gett, which currently operates in more 100 cities, wouldn’t 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 Southeast Asia. Rival carmakers are also consolidating in app-based services. In March, Daimler AG and BMW AG revealed plans to merge their car-sharing operations.
To contact the reporters on this story: Yaacov Benmeleh in Tel Aviv at ybenmeleh@bloomberg.net;Giles Turner in London at gturner35@bloomberg.net;Christoph Rauwald in Frankfurt at crauwald@bloomberg.net
To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Molly Schuetz, Andrew Pollack
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