Daimler Takes Stake In Ride-Hailing Startup Taxify

Daimler, the German carmaker that owns Mercedes-Benz, has acquired a stake in Taxify, the ride-booking startup, in a round of fundraising that gives Taxify a valuation of greater than $1 billion.

The Financial Times reported that Taxify, which is based in Estonia and has China’s Didi Chuxing among its investors, raised $175 million, with Daimler taking part in the round. The proceeds of the fundraising are expected to be used to expand the business beyond the 40 cities in Europe and Africa where it currently operates, reported the Financial Times. The goal is to launch in “tens of cities” during the course of the next few years and also scale the locations it is already operating in. For 2018 it anticipates it will have booked $1 billion worth of rides but will remain at a loss in a lot of its cities.

The report noted that Didi participated in the $175 million funding round — as well as Korelya Capital, the European venture capital firm, and Taavet Hinrikus, the co-founder of TransferWise. Daimler contributed more than $10 million in the round and will join the board of the startup. It could also add Taxify into its moovel app — one person familiar with Daimler’s thinking told the Financial Times that Taxify’s customer base by being part of the app should increase it by one quarter to 12.5 million. “Taxify is an ideal addition to our existing and extensive mobility services portfolio. With its fast-growing ride-hailing activities and extensive geographical coverage, Taxify is a perfect fit with Daimler,” Jörg Lamparter, head of new services at Daimler, told the FT.

The move on the part of Daimler comes at a time when vehicle manufacturers are making investments in ride-hailing startups as a way to enter the burgeoning industry of app-driven rides. It also provides the car makers with an opportunity to sell vehicles to fleet operators, noted the report. Taxify is focused on operating a network of vehicles and wants leadership help from Daimler. “Among all of the carmakers, we saw Daimler as the most progressive in both ride-sharing and autonomous cars,” Markus Villig, Taxify’s founder, told the FT.