Big Win for Israeli Autotech as Mercedes Owner Forms Joint Venture, Invests $50m

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Used BMW luxury automobiles stand outside a Bayerische Motoren Werke AG showroom in Berlin, Germany, on Wednesday, July 26, 2017. Carmakers' shares have dropped since Spiegel magazine reported Friday that Daimler and Volkswagen informed authorities last year of discussions they'd had since the 1990s that also included BMW AG. Photographer: Krisztian Bocsi/Bloomberg
Used BMW luxury automobiles stand outside a Bayerische Motoren Werke AG showroom in Berlin, Germany, on Wednesday, July 26, 2017. Carmakers' shares have dropped since Spiegel magazine reported Friday Credit: Krisztian Bocsi/Bloomberg

In another major vote of confidence in the Israeli autotech industry, Germany’s Daimler said on Monday it was investing $50 million in a new joint venture with the ride-hailing start-up Via to offer on-demand shared shuttle services in European cities.

The European joint venture between Mercedes-Benz Vans and Via will operate as a new entity with headquarters in Amsterdam, said Daimler, whose brands include the Mercedes line of luxury cars. Volker Morhinweg, head of Mercedes-Benz Vans, will join Via’s board of directors. It will begin offering the service in London later this year.

“Via is one of the most successful providers in the growing ride-sharing sector while Mercedes-Benz Vans has the perfect vehicles that are being continuously optimized for this job,” said Morhinweg. “By deepening our cooperation with Via, we are thus taking the next logical step in the context of our strategy for the future and are expanding our range of new mobility services.”

The Daimler investment comes as part of a fundraising round in which Via has raised a reported $200 million. The tech news site TechCrunch said the round was $250 million, citing unnamed sources. Other investors include the Israeli venture capital fund Pitango and 83North as well as U.S.-based Hearst media and the Russian oligarch Roman Abramovich.

The global ride-hailing market, whose best known player is Uber, could be worth $285 billion by 2030, dwarfing the $108 billion taxi industry, according to a Goldman Sachs forecast.

Israeli companies have emerged as key players in the auto-tech market, including ride-hailing and related services. Gett, formerly Gett Taxi, won a $300 million investment in 2016 from the German auto giant Volkswagen and formed a strategic partnership. In April, Gett acquired another Israeli company, Juno, for a reported $200 million.

Unlike other ride-sharing startups, Via in effect rents riders a seat by matching a rider by his or her location and planned destination with a driver of a taxi or other public transportation that is taking the route. Via’s service not only cuts charges but helps reduce traffic and makes better utilization of vehicles on the roads.

Via already offers 1 million rides a month in Chicago, New York and Washington, complementing local transport by allowing customers to hail a van to a virtual bus stop using their smartphone.

Daimler and Via’s joint venture will seek to partner with public transit operators across Europe and to develop vans with electric and autonomous vehicle technology. In the long term, they said, the two will cooperate to design and build vans optimized for on-demand shared rides, using Via’s software with on-board vehicle sensors, electric drive and autonomous driving.

Via was formed in 2012 by CEO Daniel Ramot and Chief Technology Officer Oren Shoval, two graduates of the Israel Air Force’s elite Talpiot program. It first launched in New York City in September 2013 and licenses its revolutionary on-demand transit technology to transportation operators globally.

The company had headquarters in New York and has a research and development office in Tel Aviv.

Also on Monday, Via signed a cooperative agreement with the Texas capital city of Austin to operate a minibus service. Shoval told TheMarker that the system in Austin, which operates along fixed routes and times, would now be able to respond in real time to demand and traffic conditions.

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