British entrepreneur Daniel Ishag, at the Fullerton Bay Hotel on 16 November 2015.
Karhoo, the start-up which had set its sights on overtaking ride-hailing giants like Uber, has stalled at the starting line. The firm told employees worldwide it will close after forming just a year ago.
“It is with much regret that we have to announce that Karhoo has had to close its service and is now looking at the next steps for the business,” read a company statement sent to The Straits Times.
“Karhoo staff around the world in London, New York, Singapore and Tel Aviv have, over the past 18 months, worked tirelessly to make Karhoo a success. Many of them have worked unpaid for the last six weeks in an effort to get the business to a better place.
“Unfortunately, by the time the new management team took control last week, it was clear the financial situation was pretty dire, and Karhoo was not able to find a backer.”
The Straits Times understands investors who had reportedly poured more than US$250 million (S$348 million) into the app will be suing to get their money back.
Karhoo, founded by British entrepreneur Daniel Ishag, 42, intended to pull together competing ride services into one app. It had planned to launch in Singapore by the first quarter of 2016, but had yet to do so.
No one in its Singapore office in Club Street would comment on the sudden closure, but The Straits Times verified that Mr Ishag apologised to staff in an e-mail to staff worldwide yesterday.
He wrote: “As I’m sure you are aware, the Karhoo journey may come to an end. It has been a profound privilege to work and learn from you all. I’m not embarrassed to say that I’m devastated that you all joined me on this journey, and that it has ended so abruptly.
“I’m also aware that over the course of the last few weeks, many have not been paid, but despite that and the uncertainty of the future, many of you have continued to come into the offices. Thank you for that.
“I deeply regret the impact and inconvenience recent events have caused you all. I feel responsible, not only to you but also to your dependents as well, and wanted to extend my apologies to you all. I truly wish things had turned out very differently.
“I’d like to thank all of you who have mailed, texted and called me over the last few weeks offering your support, and reiterating your belief in our mission. You have all been amazing and I’m humbled by your solidarity.
“Over the last 24 months, Karhoo has made an indelible mark on the world of transportation. We have helped fleet owners and drivers around the world prepare and make the necessary changes to stay relevant and successful in today’s e-hailing and on-demand economy. We have also given a voice to an industry that has always been fragmented and very local in nature. Our mere existence has changed the face of that industry across the world.
“Even though we only launched in London, and prepared ourselves to open 40+ cities by the end of the year, dozens of cities and hundreds of fleets around the worlds have benefited from our existence and are better off as a result.
“Thank you all one last time for all the energy, passion and commitment you have all shown.”
Mr Ishag was in Singapore just last month to reassure business partners and the authorities here that it was on track to launch. The abrupt about-turn took many by surprise, including taxi giant ComfortDelGro, which had teamed up with Karhoo to launch an app that would let users compare cabs by price, proximity and vehicle type.
“The sudden closure of Karhoo’s Singapore office comes as a surprise to us given that we had just met them two weeks ago to discuss the Singapore service launch,” ComfortDelGro spokesman Tammy Tan said: “While it is disappointing that this is no longer on the cards, it does not detract from our commitment to further enhance our booking app and system.”
Prime Taxi was another which had wanted to team up with Karhoo, but made a detour to Grab.
Prime group chairman Neo Nam Heng said: “The March launch was postponed to June, then to September, then to November.”
National University of Singapore transport researcher Lee Der-Horng said he had tried the app, and that “it’s actually not bad”.
“It will now be interesting to see if ComfortDelGro will partner Grab,” he said. “If so, it will mean an integrated hailing market (since the other taxi firms have signed up with Grab) – which is not a bad thing for commuters.”
Apps which pulled out of Singapore include Hailo and Easy Taxi.
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