back to article Karhoo who? Uber challenger shuts down after burning through $250m

Uber rival Karhoo has confirmed it is pulling the plug on its taxi app following reports that it had burned through the best part of $250m in venture capital dosh. The company said in a statement posted on its website: It is with much regret that we have to announce that Karhoo has had to close its service and is now looking …

  1. AMBxx Silver badge
    Joke

    Many of them have worked unpaid for the last six weeks

    Is this the first they knew about this?

    1. TheVogon

      Re: Many of them have worked unpaid for the last six weeks

      Never heard of them.

  2. monty75

    Running offices in four countries can't have helped their cashflow.

  3. Blergh

    I suspect the main reason Uber has been so successful is because it gets so much free advertising by always being in the news. I don't think I've ever heard of Karhoo, so they obviously just weren't being disruptive enough. If all that cash spent on marketing it wasn't spent very well.

    1. Valerion

      If all that cash spent on marketing it wasn't spent very well.

      Of course it wasn't spent on marketing. It was spent on 4, no doubt lovely, offices. And probably all those start-up perks, like free lunches, free beer, free pizza. Ping-pong and foosball tables aren't free either, you know.

      Nor are corporate "team-building" retreats, nor top of the range iMacs and Macbooks for all staff.

      I have no idea if any of this is true, but the general modus operandi of oddly-spelt startups these days seems to be to get as much cash as possible, spend it on cool stuff whilst doing as little work as possible (well, they have spent money on those ping-pong tables so would be silly to waste it). Keep the devs happy by letting them use bleeding-edge frameworks and nosql databases (won't matter if it doesn't work in the end as it won't actually get used), and let them do talks at trendy tech meetups ("How React and Cassandra saved our system!"). Then, hope to get bought out before the cash runs out.

      If you don't, well "fail fast" is a thing so come up with a new idea that everyone else is doing and rinse/repeat.

    2. Anonymous Coward
      Anonymous Coward

      This is it, they spend a whole load on PR, getting in the news. They're always referenced by their brand "uber" which they've spent money turning into a name for the industry.

      Theres a whole load of these services, many predate them. Only difference being that "Uber" in the USA bends some laws to allow themselves to operate not as a taxi service, but a "ride sharing". Whereas in the UK and other coutnries, they are just a taxi/minicab service.

      Burning $250M sounds like a lot of defrauding your VC's and splashing out loads of money on stupid things and never delivering a product. So many startups end up like that..

  4. Anonymous Coward
    Anonymous Coward

    Never'eard of Karhoo till now, and I'm not sure the world needs an Uber either, from what I've heard, it sounds a right cowboy operation.

  5. magickmark
    FAIL

    Never heard of them!

    Maybe they should have been called "KarWho"?

    1. ecofeco Silver badge

      Re: Never heard of them!

      The phonetic is already in the name. Sound have been the VC's first clue.

  6. tmTM

    How many users??

    "hundreds of thousands of people who downloaded the app"

    You spent quarter of a billion dollars and only got a couple of hundred thousand people to download your app???

    Investors might want to know where their money has gone, clearly no-one has ever heard of this company or their app.

  7. John McCallum

    Karhoo?

    $250M lost what were they doing with this money stocking the boilers with it? As for who they are ,never heard of them. Advertise or Die!!!

    1. TonyJ
      Joke

      Re: Karhoo?

      "...stocking the boilers with it? .."

      Thanks...I now have this weird image of them stockpiling 250 million dollars' worth of copper boilers...

  8. Anonymous South African Coward Bronze badge

    When I started at my new employment, my new employer told me this following story :

    His one friend started up a restaurant, and it got successful. So successful that he expanded. But his friend did not made use of consultants and the such, he just went to appliance shops and bought whatever he needed (ovens, freezers, fridges etc).

    His business venture was very successful due to his small overheads.

    Eventually he was approached and sold his business to somebody else. That person then got consultants in to "modernize" the kitchens and so on, like walk-in fridges, etc. Expenses was not spared.

    That venture folded as the resultant expenses was too big for the restaurant chain to bear.

    So a lesson - big blinkenlights are not always the best. Small blinkenlights that does the job just as well as big blinkenlights is better as your overheads won't impact your bottom line. Plus, small blinkenlights are cheaper to replace than big blinkenlights.

    It is the same with any business out there - start small, keep your expenses low and stay away from expensive blinkenlight kit. Get what you need, what will work for you, not just the biggest and best that you can ill afford.

    1. JimmyPage Silver badge
      Thumb Up

      RE:start small, keep your expenses low

      Oh how true !

      I worked for a small (<10 employee) company a few years back. A newer recruit was heard to grumble that additional office furniture was from a "dodgy bloke in town" rather than an overpriced "corporate" supplier. I, and some colleagues were grateful, and said so.

      "I'd rather the money went into my bonus than a sofa" was the attitude.

    2. Anonymous Coward
      Anonymous Coward

      It is the same with any business out there - start small, keep your expenses low and stay away from ....

      ...wanky management consultants?

      The world may not have needed Karhoo, but it un-needs people like Accenture, Mckinsey, BCG, PWC, KPMG a whole lot more.

  9. Spudley

    They failed because they forgot to add an exclamation mark to the end of their name.

    Karhoo! has a much better ring to it.

    1. DNTP

      Karhoo! makes me think of cars + Yahoo! and all I am getting out of that is the mental image of traffic accidents.

      Go more overboard with letter substitution. Kyrwheü or something.

    2. CraPo

      Thank god they didn't

      Otherwise the headline would've read,

      Karhoo! who?! Uber! challenger! shuts! down! after! burning! through! $250m!

      italicised.

  10. Anonymous Coward
    Anonymous Coward

    "The world needs a Karhoo"

    Arrogant to the last drop - the world was given this tempting opportunity and decided it could do without

  11. Anonymous Coward
    Anonymous Coward

    Having worked in the private hire consolidation market for a few years, I have had friends who left for Karhoo.

    I am awaiting more information from them, but this does not bode well.

  12. Jack Douglas
    Facepalm

    Kiss of death?

    We'll have to find some other "ethical" transport now:

    > "…but Karhoo works in a different way. It deals only with accredited cab fleets, not with individual drivers, so it's actually good for small businesses and small businessmen - and for the drivers and various other people they employ, and for the government’s tax coffers…"

    http://lewispage.blogspot.co.uk/2016/09/how-to-live-ethically-drink-smoke-eat.html

  13. ecofeco Silver badge

    250 million?

    Where can I get a job and waste 250 million and still get paid for it? Besides government, that is.

    1. Anonymous Coward
      Anonymous Coward

      Re: 250 million?

      The private sector, it would appear.

      Doesn't matter what you pretend your "business model" is, just set your self up as eCOfeeco, issue a self congratulatory press release from your shed, announcing your paradigm shifting innovation, fill it with techno babble, and launch your Stage 1 funding round. Over skinny soya lattes talk about "unicorns", exit strategies, balancing value between secondary buyout or IPO, mutter about mezzanine finance and the latest deal multiples, whilst stroking your goatee.

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