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Tech

Carpooling Startup Via Raises Big Money To Take On Uber, Lyft

By
Kirsten Korosec
Kirsten Korosec
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By
Kirsten Korosec
Kirsten Korosec
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May 5, 2016, 5:59 PM ET
Courtesy Mercedes-Benz
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Via, ride-sharing startup is trying to carve out a niche in a market dominated by Uber and Lyft, has raised $70 million to expand its carpooling service.

The latest funding was led by Pitango Growth. Previous investors Ervington Investments (representing Roman Abramovich), Hearst Ventures, and 83North (formerly Greylock IL) also participated.

The company says it’s in talks to secure another $30 million in the coming weeks, although it did not disclose any details about the potential source of that money.

To date, investors have sunk $107.6 million into Via. The company did not disclose what valuation it received in the latest funding.

Via has developed software that aims to make carpooling more effective by using data and smart algorithms to put more people in cars along heavily trafficked routes at a price that is closer to the cost of public transit.

Carpooling is a space that ride-sharing giants Uber and Lyft have pushed into recently. However, Via’s service is a little different. Passengers use the Via mobile app to find a driver, just like Uber. But the app doesn’t provide door-to-door service. The app books multiple passengers headed in the same direction and drops them off within a block or two of their requested destination. The company says drivers won’t stray from the route to accommodate other passengers, which is what happens when using Lyft and Uber’s carpooling.

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Via describes itself as a bus service that is as fast as a taxi. The company’s carpooling service can help cities reduce traffic congestion and emissions, the company’s co-founders Daniel Ramot and Oren Shoval said in a statement.

Via operates in Manhattan (but not in New York’s other boroughs) and Chicago. New York riders pay $5 plus tax between 6 a.m. and 9 p.m., and $5.95 from 9 p.m. to midnight. The fee is $3.95 in Chicago except during peak hours when it rises to $4.95.

Via says it will use the funds to expand in New York City and Chicago, add new cities, and sell its technology to transit authorities and municipalities. The company says the funds will also support partnerships like the collaboration with Daimler’s Mercedes-Benz that’s currently underway in Orange County, Calif. In that joint project, Mercedes-Benz’s lab is providing new Mercedes-Benz Metris passenger vans.

Via competes against two giants—Uber and Lyft, both of which are well funded. Earlier this year, Lyft closed a $1 billion funding round at a $5.5 billion valuation, more than double its last valuation of $2.5 billion in March 2015. Half of the investment came from GM. The two companies also entered into a partnership with an aim to deploy fleets of self-driving taxis.

GM partners with Lyft to develop self-driving cars:

Meanwhile, Uber, which made an estimated nearly $2 billion in revenue last year, was valued at a staggering $62 billion in December. The company is the largest ride-sharing provider, has a global footprint, and a number of partners such as Chinese automaker GAC Group and German automaker BMW.

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By Kirsten Korosec
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