With Uber just days away from going public, a tiny challenger has raised some funds of its own to take it and the rest of the field on in francophone markets. Heetch, a ride-sharing platform based out of Paris with operations across France and French-speaking Africa, has picked up a successions B of $38 million, at a valuation that we understand to be around $150 million.
Very tiny potatoes compared to the $90 billion value some have ascribed to its much larger opposition. But the list of Heetch’s investors — a combination of strategic and financial players — speaks to both the untapped opportunity that investors (and founders) think still exists in the wider marketplace, and the fact that many believe that Uber doesn’t address everything and everyone, and there remains room for more companies to come the need to convey people in dissimilar ways. (Indeed, others like Gett, which this week announced a $200 million circular, also capitalising on these gaps.)
The circular is being led by Cathay Innovation and Total Ventures (the investment arm of the grease and power giant), with participation from existing shareholders Idinvest Partners, Innov’Allianz, Alven, Felix Capital, and Via-ID, and it brings the total raised to around $70 million (following from previous rounds of $12 million in 2017 and $20 million in 2018). The funding will be used to bring Heetch to more markets — today it is in France, Belgium, Morocco and the Ivory Coast, and the plan is to extend Algeria, Cameroon and Senegal later this year — as well as to continue hiring, particularly engineers in Paris.
It helps, too, that Heetch has had its share of interest from acquirers over the years, including — our sources tell us — a come from one of the world’s biggest ridesharing platforms. (It was rebuffed on the low price offered.)
Heetch was started in 2013 by Teddy Pellerin and Jacob Matthieu to fill what it saw as a clear gap in the marketplace in Paris: providing rides to 20-somethings back to the outskirts and suburbs of Paris after late nights out in clubs in town — a marketplace that was not being served by other taxi companies, nor by public convey.
As Pellerin, who is now the CEO, describes it, Heetch took a casual come to solving this casual passenger problem: the concept was to make the service truly peer-to-peer, by bringing on drivers that were the same age and just like the people that were being driven (they might have been coming home from the same clubs).
The concept caught on virally with its user base — would you expect anything less of a service aimed at millennials? But, alas, not with the regulators, who shut down the service for not using licensed drivers.
Ironically, it was just then that Heetch got approached to be acquired, and also was picking up its earliest funding from Felix.
“We took a dissimilar come when we backed them,” said Antoine Nussenbaum, who led the deal for Felix. “We were making a powerful statement: we believe that in service categories that feel commoditised, you can build a precise community and experience, and that has been more than proven to date with Heetch.”
In fallow method, the company rebuilt itself with a refocus on working with skillful drivers, but while also trying to keep some of the ethos that made it stand out from others like Uber and the other gigantic player in the marketplace in France, the Daimler-majority-owned motorist Prive (which earlier this year rebranded to Kapten). By continuing to serve younger users; driving to parts of the wider metro venue that others would not; by taking a smaller cut from the drivers in order to incentivise them to steer with Heetch over others; and by taking a “nice guy” come to the business.
“We are more like Lyft,” Pellerin said. “We have a friendly service, with good interactions between riders and drivers. We are also acceptable at servicing younger users because we are a bit cheaper.”
And it added a loop: it saw a chance to export its version to other francophone markets where public and independent transportation infrastructure were not overly developed, and its app could be minimally adjusted to work — effectively expanding from first-world problems (skint middle-class kids coming home after a dark-hour on the town) to third-world problems (the big hole that is services in emerging markets).
These days, Pellerin said that while Paris is still Heetch’s biggest marketplace, its second-largest today is Casablanca in Morocco (and Brussels in Belgium is third).
Ironically for a company that got its commence by clearly violating local regulations, one notable aspect of how Heetch is growing is that today it’s adjusting its version to tailor it to the regulatory and other requirements in each country, which might include working with skillful drivers, or even painting cars a precise color in order to operate a livery service.
Interestingly, there is another path that the company is dissimilar from Uber (which racked up $1 billion in losses last quarter): it’s close to becoming profitable, Pellerin noted, in the four markets where it is active today.
“We are very proud to join forces with Heetch and its talented group. We are convinced of Heetch’s potential and believe in its development strategy in Europe and Africa, a region we monitor closely. Millions of Africans will be able to merit from Heetch’s services. This investment fits perfectly with our investment thesis around mobility and complements our international portfolio in the space which includes Drivy-Getaround, Momenta, Glovo, and OnTruck,” said Jacky Abitbol, Partner at Cathay Innovation, in a statement.