Big Money for Mobile Crowdsourced Transit App Moovit, With Sequoia Leading $28M Round
The notion that public transportation is a large and growing global opportunity for a tech company might seem a bit of a strange one. But, as Moovit co-founder and CEO Nir Erez sees it, “The world is bending towards public transportation because there’s no choice, cities are too crowded.” More than six billion people are expected to live in cities by 2050, according to the United Nations.
Moovit has just raised $28 million led by Sequoia Capital. The round massively ups the stakes for a company that has 30 employees and had previously raised a total of $3.5 million from BRM Group and Gemini Israel Ventures (who also contributed to the new funding).
How it works: A Moovit user opens the free iPhone or Android app to check what’s the best means of transportation to a destination and when it’s arriving at his or her current location. When the user hops on the bus and starts moving, Moovit makes a note of the actual arrival time, and updates its estimates in real time for users looking up later stops.
Erez said Moovit now has hundreds of thousands of daily users who generate 10 million to 12 million active reports per day. They have made 40 million trip requests in the past year. The app only became available outside of Israel about a year ago, and it is now especially popular in Santiago, Chile; Bogota, Colombia; and Rio Sao Paulo, Brazil.
While most Moovit reports are passively contributed, the company also seems to have hit on the crowdsourcing jackpot of voluntary contributions. Erez said 96 percent of Moovit users who are asked to click to specify whether there are many available seats, few available seats or no available seats have been willing to provide an answer.
I asked in an article this summer, “After Waze, What Else Can Mobile Crowdsourcing Do?” with Moovit and public transit being one of the potential answers.
But while Moovit often talks about itself as “Waze for transit,” and notes that Waze co-founder Uri Levine is on its board, Erez has refined the pitch a bit as the company has grown and the competition has evolved.
Erez said in an interview on Tuesday that transit shouldn’t just be considered another feature of maps.
“With public transportation, you expect way more than a map. Unlike driving a car, you can’t tell a train where to go, or a bus. You’re specifically focused on information about getting to a place on time,” he said. “The challenge is to look at every certain moment and ask what is the best combination of means to get to my destination. If you just have static data, then the fact that it usually works doesn’t help you today.”
The notion that Moovit merits an app unto itself is an important one for the startup, given the competition. Google already does transit as part of its maps, and Apple bought two different mobile transit apps — Embark and Hopstop — as part of its efforts to compete. With $30 million on the line, Erez and Sequoia obviously don’t want the company to be another little folded-in “acqhire.”
So how will Moovit become a business? First, by selling and recharging public transportation tickets, something it is testing in Poland and Israel. And later, by selling “close to my bus stop” advertising.