Japan's KDDI invests in UK-based taxi hailing startup

One of Japan's largest mobile operators, KDDI, will team with Hailo on its Tokyo launch planned for this year

Hailo, the U.K.-based developer of taxi-hailing mobile apps, has landed fresh investment from KDDI, one of Japan's largest mobile operators.

Hailo's technology, which is similar to other ride-finding startups such as Uber, uses smartphone apps that directly link potential passengers and drivers to arrange pickups, as well as handling billing services. This could drastically change the landscape in Japan, where there are number of popular apps for calling taxis in Japan, but they mainly register requests to dispatchers, logging a user's GPS location. Taxis in Japan are mainly operated by large firms, but drivers can also buy and run their own cars.

Japanese venture capital firm Global Brain, which manages ¥50 billion (US$540 million) for KDDI, said Tuesday it had made an investment in Hailo, without naming the amount. The firm said in a Japanese press release that KDDI and Hailo will work together to "optimize Japan's taxi operations."

A KDDI spokeswoman said it is too soon to discuss specific tie-up plans.

Hailo said in a blog entry that it has raised $30.6 million in a funding round led by New York-based Union Square Ventures, which also included KDDI and Virgin Chairman Richard Branson. The company previously said it had raised $20 million from a group of venture firms.

Hailo said in December it had 10,000 drivers and had arranged 1 million rides through its service in London. It also operates in Chicago, Boston, Dublin and Toronto, and will also soon launch in Madrid and Barcelona. It plans an expansion to Tokyo this year, but is currently focused on the competitive New York market, where the local commission recently revised its rules to allow such services.

KDDI runs "au," one of Japan's largest mobile operators, with about 37 million subscribers. The country's largest operator, NTT DoCoMo, has 61 million, while Softbank has 31 million, without accounting for the recent acquisition of a smaller local carrier.

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