Ride-hailing app Gett seeks buyers
Gett Inc., the ride-hailing app valued at more than $1 billion and backed by Volkswagen AG, is looking for buyers in a bid to compete with larger rivals, people familiar with the matter said.
The Israeli tech company has approached potential bidders including other car-hire firms, the people said, asking not to be identified because the discussions were private.
Gett may sell its entire business or offload regional operations outside of its home market, said two of the people. The company may also weigh a listing, partnership or sale of a minority stake to raise capital, another person said.
Deliberations are preliminary and there’s no guarantee Gett will go ahead with a sale or initial public offering, the people said.
“As Gett is on a clear path towards profitability globally, including the U.S.,” in the first half of 2019 “it should not be surprising that Gett may receive inbound inquiries from strategic partners,” a spokesman for Gett said.
Gett had a promising start, attracting more than $300 million from Volkswagen in 2016 as the carmaker looked for a viable challenger to Uber Technologies Inc. and Lyft Inc. This year Gett has raised $80 million from investors including Swedish fund manager Vostok New Ventures Ltd.
However, the business has been struggling in the face of growing competition.
Vostok cut the value of its stake by 14 percent so far this year, according to its third-quarter report. That puts its 4 percent holding at $55.5 million, giving Gett a value of about $1.39 billion. Volkswagen has also decided to funnel resources into a home-grown ride-sharing unit called Moia.
Facing intense competition in the U.S., Gett has also weighed an exit from the country just over a year after spending $200 million on an acquisition to enter the market, people familiar with the matter said in July.
Gett isn’t the only ride-hailing company struggling to maintain growth. Uber’s sales are dramatically slowing even as the firm spends more to expand. Lyft’s losses increased to $254 million in the third quarter from $195 million last year after spending more on research and development, a person familiar with the matter said. The two companies are also considering IPOs next year.