Fasten may have a long way to go in its fight against gargantuan competitors like Uber and Lyft, but investors believe the Boston startup can still carve out its own space in the ride-hailing industry.
The startup closed a $10 million Series A round on Tuesday that was led by Silicon Valley-based Almaz Capital and Russian investment firm UFG Capital, co-founders Kirill Evdakov and Vlad Christoff told BostInno. The round was first disclosed in a Form D filing with the U.S. Securities & Exchange Commission and it brings total funding to $15 million, they said.
"You want to build a profitable business, not a money-burning machine."
Fasten will use the new funds to hire more developers, accelerate product development and "solidify" its positions in its two current markets: Boston and Austin.
Evdakov, the startup's CEO, said Fasten became profitable in October, making the startup unlike Uber and Lyft, both of which have lost millions of dollars as they continue to invest in growing worldwide.
"You want to build a profitable business, not a money-burning machine," Christoff said.
While total driver numbers weren't disclosed, Evdakov said 50 percent of total ride-hailing drivers in the Boston area use Fasten while 90 percent of drivers in Austin use the app. Fasten was one of the first ride-hailing companies to enter Austin after Uber and Lyft abandoned the city in early May over a new rule requiring all drivers to be fingerprinted.
"We complete more rides than all companies combined" in Austin, Evdakov said of Fasten in comparison to other ride-hailing companies operating there on a monthly basis, without providing specific numbers.
While Fasten has been operating in a crowded market, the startup aims to stand out by charging less for rides, taking a smaller cut of fares from drivers and putting a premium on treating drivers like customers. Fasten drivers are only charged a flat fee of $1 per ride. Uber and Lyft, on the other hand, take a larger cut from drivers based on a percentage of every ride. Fasten also recently opened a lounge in Boston for its drivers, giving them a space to network or get questions asked.
Fasten has already started the process of raising a Series B round, Evdakov said, so that it can start expanding into more cities. The startup has 30 employees in Boston, four in Austin and 70 overseas, and it plans to grow its Boston team.
