The Israeli cooperative transportation company Via, which a month ago completed a fundraising round of $110 million at a valuation of $3.5 billion (expandable), is acquiring Citymapper, a British start-up that has a travel planning application, for $100 million. Did Via actually fundraise to acquire? Definitely possible. Via wants to be an operating system for all aspects of public transportation – for passengers and transportation companies. The question is whether Via is really worth the amount she says she is worth. Could be, but not sure. The companies raised mainly during the period of euphoria in the markets, when the interest rate in the world was zero until a year ago – and the money was looking for where to go, and it came to good companies but also to problematic companies (this is not necessarily the case here). But the situation in the market changed in the last year, the shares of the start-up companies that went public collapsed by dozens of percent, some even by 80-90%. In the non-tradable market this does not yet officially happen because the companies do not raise and rely on the existing cash, but this will probably happen as the economic slowdown (and maybe a recession) lasts, the companies will run out of money and they will have to raise in lower amounts as well. Here’s why we have a hard time believing these high valuations.
Via last year brought in $200 million in revenue, double that of the year before, but this happened not only thanks to organic growth but also because of two acquisitions it made when the hype in the markets was at its peak, and in any case Via is apparently still a loss-making company. The companies did not provide details on the financial results of the acquired company, but it has raised $60 million since its establishment and it is likely that its revenues are significantly lower than those of Via, and that it is also still loss-making. The question is of course when the companies will be able to reach profitability. When money was cheap and looking for somewhere to go, dreams of growth could be sold. The bottom line was less important on Wall Street. But that has changed since the bubble burst last year. Now investors are looking for profitability. On the other hand – when the euphoria returns to the markets, it is likely that investors will once again indulge in dreams of meteoric growth and forget that in the end the goal of a company is to make money and provide value to investors and not just to dream of growth.
In any case, according to Via, while Via enables cities and transportation authorities to plan and operate their public transportation networks, Citymapper helps passengers navigate the urban transportation network through one intuitive application. “By integrating Citymapper into its technology platform, Via will be able to offer an integrated solution for cities, transit authorities and passengers.”
Citymapper was founded in 2012 and according to Via has more than 50 million users in over 100 cities worldwide. Through the app, users combine public transportation, walking, cycling, motorized scooters, taxis and other options. The user can plan a trip based on the criteria that are important to him – type of transportation, arrival time, duration of the trip, cost, etc.
The co-founder and CEO of Via Daniel Ramot brags and says today following the purchase: “There are a lot of companies that want us to buy them. By bringing our teams together, there will be a wonderful opportunity to share Citymapper’s capabilities with cities and transit authorities all over the world so they can create the most convenient and convenient travel experience for their communities.”
Let’s recall that at the end of 2021 Via closed its operations in New York and also in Washington, and this after it acquired the company Remix during 2021 and a year earlier it acquired Fleetonomy. But there is a difference – those purchases were made during the great euphoria in the markets. Money was cheap and looking for somewhere to go. The purchase now is more interesting because it comes at a time when companies need more to keep their money. So Via is probably sure she has enough money in the bank. The question is whether this is true and whether she is not spending too much money that she should keep, and whether it will force her to get laid off.
The company says, on the other hand, “These purchases come at a time of strong momentum in the TransitTech industry, when technology and innovation pave the way for a new generation of smart and flexible transportation solutions.”
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