Revving up its competition against ride-sharing services such as Uber and Lyft, Israeli startup Via raised a whopping $70 million in financing last week; additional $30 million in strategic investments are expected to close in the coming weeks. This $100 million monster round – one of the largest raised by an Israeli startup so far this year – could help the budding app carve out its own niche in a world that’s becoming saturated with transportation apps, including Israeli mobile taxicab service Gett.
The current funding round was led by Israeli venture capital firm Pitango, along with the Israeli VC arm of Bank Hapoalim, Poalim Capital Markets, and others. Since its inception four years ago, on-demand transportation app Via has raised a total of $137 million. Previous investors include Ervington Investments (representing Russian billionaire Roman Abramovich), Hearst Ventures, and 83North.
The new funds will be used to drive growth in New York City and Chicago, where Via is currently available, as well as to expand into new markets, and aid transit authorities seeking to improve their services by using Via’s technology. In addition, the funds will support strategic partnerships to operate Via’s platform in novel environments, such as the collaboration with Mercedes-Benz Research and Development North America currently underway in South Orange County, California.
Headquartered in New York City, the company’s development center is in Tel Aviv, Israel, and it has an office in Chicago. Founded in 2012 by Daniel Ramot and Oren Shoval, Via enables tens of thousands of passengers each day to share their ride with others headed the same way. Via has so far provided more than four million rides, and is growing rapidly. Ride prices start at $5 plus tax for those who prepay on the app.
Contrary to its competitors, Via doesn’t offer door-to-door services; rather, the app books multiple passengers headed in the same direction and drops them off within a block or two of their requested destination.
How does it work? An algorithm matches, in real time, multiple passengers headed the same way with a single large SUV or van. Passengers request rides through a mobile app, and Via’s systems instantly select and, if necessary, re-route the vehicle that best matches the passenger’s route.
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The algorithm’s smart routing allows passengers to be picked up and dropped off in an endless stream, without taking riders out of their way to accommodate other passengers. Via is different than its competitors because its platform “moves a high volume of riders while using a fraction of the number of vehicles utilized by other on-demand car services,” according to the company.
“Via is creating the public transit system of the future”
Israelis Ramot and Shoval, who previously led engineering projects for the Israeli Air Force, have PhDs in neuroscience and systems biology from Stanford University and from Israel’s Weizmann Institute, respectively. The idea for Via came from Israel, where many people rely on shared vehicles called “Sherut” (service, in Hebrew) to travel along major streets and even between cities.
“Via is creating the public transit system of the future,” according to Ramot and Shoval. “With existing transportation infrastructure straining, and in some cases failing to meet rising demand across the globe, Via’s dynamic bus system offers cities a smart solution to traffic congestion and emissions. We’re delighted to have secured significant backing for our vision: eliminating single-occupancy vehicle trips by creating a mass transit system powered by advanced algorithms and data.”
According to Isaac Hillel, managing general partner of Pitango‘s Growth Fund, Via provides “a true public transit solution” and should be able to “capture significant market share in the rapidly evolving transportation market.”