Wheely founder and CEO Anton Chirkunov.
Wheely, which pitches itself as a “luxury” alternative to ride-hailing giant Uber, plans to raise at least $30 million to fuel an expansion overseas.
The start-up currently operates across three European markets — London, Paris and Moscow — but founder and CEO Anton Chirkunov said it would seek the extra funding next year to expand into either the U.S. or Asia.
It’s currently got its sights set on three major cities in America — New York, Los Angeles and Chicago — and four across Asia — Tokyo, Seoul, Osaka and Shanghai. Though it’s not yet decided which region it will expand to first, the firm’s boss told CNBC it invests around $10 million on each new city expansion.
“This year, we’re focused on building out the business in Europe. There are some milestones we want to reach,” Chirkunov said in an interview. “Realistically after that we would say it’s time to do another fundraise — a slightly larger one — and to expand beyond Europe.”
London-based Wheely claims to have a run rate — which is used to measure annual financial performance — of $110 million in gross bookings. While the overall group remains lossmaking, Chirkunov said it’s reached profitability in Moscow. To date, the company has raised $28 million from investors.
What is Wheely?
Wheely began life in Zurich a decade ago as its Swiss-Russian founder Chirkunov set out to establish a data aggregation app similar to Booking.com but aimed at connecting users with the best taxis rather than hotels.
Without a driving license of his own and unhappy with his experience of the taxi industry, Wheely’s boss eventually switched focus to develop a premium ride-hailing platform that connects riders with accredited chauffeurs. Its services are currently available in London, Paris and Moscow.
Chirkunov said he’s had a handful of bad experiences in a taxi, but one in particular came to mind. When living in Zurich, for example, a cab driver asked him to exit the vehicle because Chirkunov was yawning. “He thought that, if you yawn, you’re being disrespectful,” he said. “I’m sure there are worse stories.”
“These sorts of things basically led me to try to build something that I would like as a customer,” Wheely’s CEO said, adding he’s a day-to-day user of his own app. “I don’t have a car. I don’t drive. I don’t have any special arrangements with my company like a certain driver driving me.”
Chirkunov said he’s not interested in the “mass market” for ride-hailing, referring to the likes of Uber and Lyft. Instead, the company targets affluent and high-net-worth users who want a more personalized journey. For instance, he said, you can make a request on the app to have a driver collect flowers for a loved one.
Unsurprisingly, rides on the app aren’t cheap. It’ll set you back about £50 ($65) for a trip to Heathrow Airport from West London on its least expensive business-class service, while a first-class fare would cost £75. All its drivers arrive in high-end Mercedes-Benz cars.
News of the company’s plans to turn on the fundraising taps comes as Uber faces the prospect of being blocked from its biggest European city. London’s transport regulators decided to strip the U.S. ride-hailing giant of its license to operate in the U.K. capital last year over safety concerns.
While it can continue operating during an appeal process, the move gave rise to Uber rivals jumping at the opportunity to capitalize on its woes in London. Indian competitor Ola for instance launched only recently, looking to unseat Uber as the top player in the city.
While Chirkunov didn’t comment directly on Uber’s situation, he said he’s not worried about facing a similar fate as “our standards are higher” than those required by regulators. “This makes it easier for us to operate.”