Specialist property and asset consultants Lambert Smith Hampton have been appointed by the administrators of Karhoo to market what remains of the business and its assets.
Karhoo is said to have raised as much as $250 million from investors including Panorama Point Partners, and was headquartered in New York, having been founded in London 18 months ago, employing between 180 and 200 staff in New York, London, Israel, and Singapore, according to Business Insider, who also say the firm paid the price for a misguided marketing strategy of offering too many free rides.
In a press release Lambert Smith Hampton say; “The company’s platform for regulated/licensed taxi and private hire fleets enables both national and local operators to enter the ‘e-hailing’ marketplace.” They go on to say the app is on both iOS and Android app stores, and that “The company already has significant contracts in place with fleet operators in major cities.
Revenue, they say, “is generated by typically retaining 10 per cent of journey fares.”
The press release reveals that “Karhoo secured good initial financial backing to develop its cloud based technology. However, further funding is now required to take the business forward. As a consequence Paul Cooper and Paul Appleton of David Rubin & Partners have been appointed administrators to protect the business and assets while a purchaser is sought.”
Roland Cramp, Directory of Machinery & Business Assets at Lambert Smith Hampton adds “ this sale provides an opportunity to acquire a unique, highly scalable business, which differentiates itself from other models by enabling all existing taxi fleets to enter the ‘e-hailing’ market place while also offering the customer unrivalled choice.”
Whilst it may be an unusual step to let the public know via press-release that Karhoo’s assets are for sale, the bigger question is perhaps, will anybody step in to save a business model that is proven to work but is being done better, at a more advanced stage, by another 2 or 3 firms, and one start-up superpower, namely Uber.
Perhaps the underlying tech is attractive and could be “pivoted” to produce a different kind of product, but where does that leave the contracts in place with overseas suppliers and taxi-firms, and what firm would pay such a high price rather than appointing their own teach team? Start-up founders are nothing if not full of self-belief determination to do things their way.
Karhoo’s technology is cloud-based, and “highly scaleable”; a shame the firm never got the chance to take advantage of the UK’s stated backing of companies with the potential to “scale-up”.
No, if anybody does end up buying the what remains of the Karhoo not quite empire, it would most likely be Uber. They could afford it, and sifting through the wreckage of a once close rival and plundering their best stuff might just make Uber pause for a moment.
It has been suggested that Karhoo has debts of £22 million, and has left behind unpaid staff and suppliers.
Its entrepreneurial founder Daniel Ishag had once claimed that Karhoo was bigger than Uber in London, and there may have been a time when that was almost true, but according to This Is Money Ishag was more interested in spending thousands of pounds of company money pampering his pet pug than finding a suitable rescue package.
Perhaps there wasn’t one. The only entity that seems to be able to compete with Uber, or indeed Facebook, whose latest state of crisis involves making up its News-Feeds as it goes along, is China.
But China already has Didi Chuxing, the world’s fourth largest start-up Unicorn, valued at $45 billion.
Let’s hope some adventurous Londoners dream up a use for 80,000 registered users; mobile, millennial, men and women about town Londoners; and turn it into London’s next big talking point.