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German automaker Daimler leads the funding round in Taxify after raising $175 million that has a valuation of $1 billion.

Daimler, already a majority owner or significant investor in a string of online taxi services across Europe and the Middle East, is adding Taxify to its investment portfolio, according to the statement of both companies.

The Estonian taxi service startup has raised $175 million as it plans to expand beyond its network of 40 cities in Europe and Africa.

China’s Didi Chuxing also counts as an investor of the former company. The company also participated in the funding round, along with European venture capital fund Korelya Capital and TransferWise co-founder Taavet Hinrikus, with more than $100 million of the investment coming from the German automaker.

Daimler-Taxify Deal

Under the latest deal, Daimler will join Taxify’s board. The carmaker may roll the service into its moovel app, a step that would increase Taxify’s customer base by a 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,” said Jorg Lamparter, head of new services at Daimler.

Taxify, which has grabbed business from Uber in Central and Eastern Europe and major African cities, said it will use the investment to develop its technology and further penetrate its existing regional markets. It counts 10 million passengers and 500, 000 drivers in more than 25 countries where it operates.

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On-Demand Transportation

Car manufacturers are investing in ride-booking services as a way of entering the fledgling transport services market, in which consumers pay per ride rather than owning a car directly.

“We’re on a mission to build the future of mobility, and it’s great to have the support of investors like Daimler and Didi,” said Markus Villig, CEO, and co-founder of Taxify, in a statement.

“This is just the beginning as more and more people give up on car ownership and opt for on-demand transportation.”

Uber, which has faced a range of struggles in its businesses over the past two years, remains the world’s largest player in the online taxi-hailing market outside China.

However, it has retreated from several regional markets, including Southeast Asia in March, and has taken a backseat in Russia and several nearby countries after forming a joint venture with Russia’s Yandex.

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