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Gett Inc., a taxi-ordering application that competes with Uber Technologies Inc., raised $300 million in a strategic investment from German carmaker Volkswagen AG to fund its growth in Europe and New York City.
Gett, based in Tel Aviv, Israel, has offered rides for as low as $1 and expanded its services to include deliveries of goods. The company hired Wells Fargo & Co. to find investors for the round, people familiar with the matter said in February. Volkswagen’s contribution brings total funds raised by Gett to over $520 million, the taxi service said in an e-mailed statement Tuesday.
Volkswagen made the investment as part of a push to boost digital offerings and move beyond its diesel-engine manipulation scandal. Mobility services promise strong growth prospects and earnings potential in coming years, VW said Tuesday in an e-mailed statement.
“We aim to become a world leading mobility provider by 2025,” VW Chief Executive Officer Matthias Mueller said in the statement. “Within the framework of our future Strategy 2025, the partnership with Gett marks the first milestone for the Volkswagen Group on the road to providing integrated mobility solutions that spotlight our customers and their mobility needs,” he said.
With operations in over 60 cities worldwide, including London, Moscow and New York, Gett is a major ride-hailing provider and services will be expanded further as part of the alliance with VW. In March, it offered to buy London’s Radio Taxis in a move that would bring Gett’s car fleet in the city to 11,500, a number the company says amounts to half of all licensed taxis in the city.
Expanding digital services in connected cars is a cornerstone of VW’s strategy through 2025, which will be presented in mid-June. More than 250 employees are developing the plan, which will comprise eight key initiatives across the group, Mueller said last week at an internal management meeting at the carmaker’s Wolfsburg, Germany, headquarters.
Volkswagen is not the first car manufacturer to get involved in the ride-hailing business. General Motors bought a 9 percent stake in Lyft for $500 million in January and Apple made a $1 billion investment in China’s Didi this month.
Completion of this transaction is still subject to merger control clearance by antitrust authorities.
©2016 Bloomberg L.P.
This article was written by Christoph Rauwald, Gwen Ackerman and Kim McLaughlin from Bloomberg and was legally licensed through the NewsCred publisher network.