Hailo raises $17M – Solving the “duality” problem
Congratulations to the team at Hailo who have just completed a $17M fund raise from Accel, along with previous funders Atomico and Wellington. I invested in Hailo last year as part of their launch funding and it is fantastic to see the excellent team progress so swiftly in meeting and exceeding their targets.
The key to any investment is a top quality team and Hailo have that in spades led by Jay Bregman. The other key to Hailo is that they had a great answer for solving the “duality” problem that comes with trying to innovate in the taxi space. In order to get customers to use a new app to book taxis with, you need to have a large number of taxis; however, to get a large number of taxis, you need to have a large number of potential customers – the duality problem; you need both parts of the puzzle at the same time. How do you solve this enigma? – Uber, the leading contender in this market up to now, tends to solve this by buying up taxi space, but this gets expensive. What set Hailo apart for me was the innovative solution they had – first create an app that the taxi drivers would want to use even if there are no customers bringing money. They created an app that helped taxi drivers monitor their fares, meet up with their mates, note when bursts of customers were available, take credit cards, and more – using this Hailo signed up over 1,000 black cabs in London in months, without having to buy capacity. Then when they launched the consumer app, users could get a taxi within minutes as they had a large supply – ingenious. There’s a lot more to Hailo’s success of course, but solving the duality issue was the key.
Many other business models have the duality problem when starting up – finding innovative solutions to solving this, without buying into the market, is a strong indicator of potential success.