Interview"Dave Waiser suited Gett in the past, today it needs different leadership"
"Dave Waiser suited Gett in the past, today it needs different leadership"
Per Brilioth, CEO of the VNV Global fund, recently visited Israel and in an exclusive interview with Calcalist spoke about Gett’s profits, management and future plans
The Swedish investment fund VNV Global is currently the largest shareholder in the Israeli travel app Gett. Per Brilioth, the fund's CEO, recently visited Israel and in an exclusive interview with Calcalist stated, "Gett will be profitable at the end of the year," says Per Brilioth.
The fund, which is also invested in two other startup companies in Israel, the cyber company GuardKnox and automotive startup NoTraffic, strongly believes in the future of Gett and evidence of this is the recent acquisition of the company’s huge debt to Russian bank Sberbank.
The fund invested $40 million in the purchase of debt amounting to $140 million and thus became the main shareholder with approximately 25% of the company's shares and, in fact, controls it. The main goal for Per Brilioth is to make Gett profitable. To this end, the company appointed new management, decided to set aside all non-revenue-generating and non-profitable activities, and chose to focus on the company's traditional taxi services in Israel and the UK.
Last March, Dave Waiser, one of the two founders, announced his retirement from the company. Max Krasnykh and Matteo de Renzi, who were previously COO and Managing Director of GTM and UK, respectively, replaced Waiser as co-CEOs. Gett’s global Executive Committee also includes the current CFO Aliaksei Aneichyk and current MD of Gett Israel Mark Oun, among other senior leaders in the business.
How much have you invested in the company to date and how much have you invested in acquiring Sberbank’s debt?
“We started investing in Gett in 2014, we began with $25 million and, to date, we have invested approximately $60 million before purchasing the debt. Initially, the fund held only 5% of the company. Today, following the purchase of the debt we are now the primary shareholder.”
Since the Swedish fund's shares are traded on Nasdaq Stockholm, the company reports Gett’s value every quarter. The value of the latter soared to an impressive $2.5 billion in August 2021, but in VNV’s latest reports the valuation plummeted to about $265 million. To date, Gett has raised $800 million from a number of leading investors such as Volkswagen, Len Blavatnik and others, meaning the company is valued significantly below the amount it has raised.
What do you think of the fall in valuation?
“Valuing a company is more of an art than a science. Gett was about to make an IPO worth a billion dollars and that was the right price compared to Uber, Lyft and the like. However, the war in Ukraine began and inflation picked up and all of Gett's competitors fell and it is very natural to collapse in valuation. We are long term investors and we will never rush to sell. The price for Gett is currently very low and, if I am right, it will rise.”
How did you feel when the company's value collapsed to a few hundred million dollars?
“Gett has become much simpler to examine now in terms of value. In the past, they had debt and all kinds of stocks which made analysis hard. Today, following our entry there is only one type of stock and no debt. The value of the company was much higher but this is no longer the case. I’ve been part of our fund for many years, in 2000 my portfolio dropped to zero, in 2008 the value dropped again. The market will rise again, it is a part of life. Currently, there is a lot of uncertainty and this is putting pressure on the stock. I believe profitable companies will receive a higher valuation very soon. Obviously, I'm sad the company's value went down. If I did not feel sadness it means I am in the wrong profession. I have seen collapses such as this in the past and the key is to stick with the company.”
Will Gett be a billion dollar company again?
“I think it has the potential to be.”
Is Gett’s business worth a billion dollars?
“Currently, I do not think it is a billion dollar business as the Nasdaq is trading at a very low price and you can even see that Uber has fallen significantly. Therefore, you can not expect Gett to have a higher value than Uber. However, does Uber have the ability to rise again? I think so. And so does Gett.”
Will Gett go public?
“I am a public company and I do not push my companies to IPOs. Sometimes there are benefits of raising capital; for me it is not a requirement. IPO is not the end of the road. I hold shares of companies that went public so I have an understanding that it is not the end of the road in terms of the company's potential.”
What happened to Gett‘s management? Dave Waiser, the mythical founder, left abruptly. He didn’t even stay on as a board member.
“Dave Waiser was the founder and face of Gett. Dave is a founder with a vision that founded the company a long time ago, even before Uber. He opened the company and built a good team. That is Dave's main strength - building a product and a team. We went through many difficult times with the company, we had Volkswagen's investment, the Covid-19 pandemic. During this period, Uber became a tough competitor, similar to Yandex in Russia and others. The industry became very competitive and now we are helping stabilize the company and this is one of the only companies in my portfolio that can be profitable. Our current demand is to stabilize the company and reach profitability and for that we have the Israeli and UK markets. I do not think these demands suit a founder with a vision.”
There was a sense that he was pushed out, that his time was up.
“I have seen this happen many times where founders build the company and then they grow and the company understands that it needs someone new to lead it. The founders love the company and it is never easy for them to leave.”
Was he a burden to the company?
“It is natural for a company that goes through several stages to need a founder with a vision at first and then, sometimes, a company needs someone else and Gett is at that crossroads. The role of the founder is to set the company in motion but as the company matures someone else may come and push it forward. If we need Dave we can call him. You can not stay in a company if you want to move on to your next thing.”
Will Gett’s top management be replaced?
“I think the company's current management is excellent and Mark manages the operations in Israel very well. They are working very hard in the UK and Israel and now they need to build a strong and profitable company.”
In recent years, Gett has consistently promoted its platform for businesses. Its platform for the business sector, called Roaming, enables its customers to enjoy access to a wide range of automotive services worldwide through strategic partnerships with leading companies in the field. In the interview Brilioth emphasizes that, for now, this is not the direction the company is taking, rather it is returning to its businesses that work well.
In Dave's time there was a lot of talk about the company's platform for business.
“There is a huge market for businesses, and there are a lot of companies operating in that sector. I see a lot of investments and a lot of digitization so we must find a niche for our activity there. I think Gett has the potential to operate there but, first of all, the company needs to be profitable and stabilize itself. Visionaries do not like to talk about the stable assets that generate income and profitability and prefer to talk mainly about the future.”
Gett’s most profitable and lucrative activity is in Israel and, in the past, there was talk of a possible split of the activity or the sale of the activity locally. Have you thought of separating the Israeli activity into an independent company?
“I think it is good that the company has two very strong markets, one in Israel and the other in the UK , with extensive potential in the business sector. There is no point in separating them. Israel is just one market that is very important to us, however, it is only one market and we can operate in a lot of markets under our platform.“
What are the company’s next steps?
“The company must first be profitable, and this will happen very quickly. It will be profitable already this year. People have forgotten that the purpose of companies is to be profitable and only when the company will be profitable will it earn the right to do other things.”
How will Gett turn profitable? Only through revenues or also through budget cuts?
“We will be profitable by increasing revenues and there may also be a need for cuts, but no layoffs are expected in the company.”