KUALA LUMPUR, Dec 19 — Following reports that Rocket Internet-owned Easy Taxi has bowed out of three markets in Asia, Digital News Asia (DNA) has received information that the company’s Malaysian operations have also been downsized.
Nizran Noordin, chief executive officer and founder of Taxi Monger, confirmed with DNA that two soon-to-be-former employees of the company had approached him yesterday regarding job opportunities with his taxi app startup.
He said the duo reported that approximately 20 to 30 members of their team were informed on Dec 17 that they would be let go at the end of the month.
Requests to Easy Taxi for verification and further comment about its Malaysian operations were not answered as at press timetime.
DNA has also reached out to parent company Rocket Internet for comment.
In a statement released to Josh Horowitz at Tech in Asia, the company said it had made a decision to “focus on core markets” to explain its withdrawal from India, Hong Kong and Indonesia.
“The app will continue operational in these countries as long as service levels are acceptable, and we are providing any necessary support for our local partners.
“India was not yet fully operational and we have simply decided not to continue pursuing the full launch,” the company said.
It is also understood that Mario Berta, regional managing director for Easy Taxi in South-East Asia, is no longer with the company.
Easy Taxi’s scaling down comes amidst the backdrop of recent high-profile rounds of funding secured by regional and global competitors.
On Dec 4, Malaysian-founded but Singapore-headquartered GrabTaxi announced it had secured additional funding amounting to US$250 million (RM868.362 million) from SoftBank unit SoftBank Internet and Media Inc (SIMI), bringing the total amount it has raised to date to more than US$330 million. It is currently active in 17 cities across six countries in South-East Asia.
On the same day in a different time zone, global competitor Uber, which is active in 53 countries, announced it had raised a new US$1.2 billion round of financing, with investors valuing the company at US$40 billion.
Industry watchers have long pointed out that the e-hailing space is one defined by high capital expenditure requirements, and a stomach for losses as the war for the market share and the hearts and minds of consumers is waged.
In comparison, Easy Taxi had raised US$77 million to fund its global footprint of 162 cities in 32 countries, with the latest round of US$40 million secured in July led by the Russian Phenomen Ventures and with the participation of Tengelmann Ventures.
It is uncertain if Rocket Internet will pump in more funds into Easy Taxi to further fuel or sustain its operations in its current markets.
The Berlin-headquartered company had its initial public offering (IPO) on the Frankfurt Stock Exchange on Oct 2. Bloomberg reported that it was Germany’s biggest IPO since 2007, which priced the US$42-billion sale “at the top end of its range and turning founders Samwer brothers into billionaires.”
The stock opened at €42.50 (RM181.279) and immediately fell to €38, closing on opening day at €37, down 13 per cent. The shares traded below the issue price for most of the weeks following the IPO, putting the company’s gross proceeds from the listing exercise at around US$1.74 billion.
Jon Russell, a writer for technology news blog TechCrunch and long-time watcher of the region’s startup sphere, said that given the vast budgets and funding rounds of many of its rivals, the “cautious move” to withdraw from certain markets makes sense.
Asked by DNA to share some insight into wider industry ramifications, he said that taxi-booking apps typically don’t reveal user numbers or much business data, however “there isn’t much evidence to suggest that Easy Taxi has a strong position in any market in Asia.
“Easy Taxi doesn’t enjoy a dominant position in any market in South-East Asia, so even before today’s news, you’d be hard pushed to say that South-East Asia is anything but a two-horse race, although Hailo has entered Singapore and has some interest in expanding into other markets in time,” he said.
Russell said that Rocket Internet takes a data-based approach to managing its business – both in terms of investing and scaling back.
“Given the sheer scale of investments in many of Easy Taxi’s rivals in Asia, we’ve reached the point of ‘go big or go home’ in some markets.
“I think the fact that Easy Taxi is in over 160 cities in more than 30 countries means Rocket Internet will adopt a more global focus to identify more nascent markets – where its resources will go further and with less competition,” he said. — DNA
This story was first published here.
