Uber is diversifying with the purchase of an electric bike rental startup Jump, the two companies announced Monday. No financial details of the transaction have been disclosed in an official capacity, with Bloomberg reporting Uber ended up paying over $100 million for the firm, citing a source with knowledge of the agreement. Originally founded as a bike retailer in 2010 by Ryan Rzepecki, the New York City-based company is now considering a major European expansion a year after transitioning to B2C rentals, with Mr. Rzepecki — also its CEO — suggesting that the firm will be rolling out its service in many more markets starting next year.
Mr. Rzepecki said acquisition talks first began while Uber was still making headlines for all the wrong reasons on a daily basis, having admitted the firm didn’t have high expectations from its suitor. “Instead, everyone we met was smart, passionate, and genuinely wanted to help our team succeed,” the entrepreneur recalled, without clarifying how long the negotiations themselves lasted. Uber will now be integrating some of Jump’s technologies into its own solutions as a continuation of its efforts to transition from a ride-hailing company to a “multi-modal platform,” Mr. Rzepecki said. The entrepreneur will stay with the firm that’s expected to retain its own name and branding despite joining Uber’s corporate family and will report directly to Dara Khosrowshahi, CEO of what’s still widely believed to be the world’s most valuable startup. The purchase of Jump is in line with Uber‘s diversification strategy that led to the introduction of services such as UberEats and Uber Health. The San Francisco-based company has also been experimenting with boat-hailing solutions since at least mid-2015 and is likely to continue expanding its activities to more sectors moving forward.
A diversified business model that’s more likely to allow for long-term sustainability is something that Uber is now focusing on in an aggressive manner, possibly so as to appeal to future investors, with Mr. Khosrowshahi repeatedly stating the firm is targeting an initial public offering in 2019 but remains primarily oriented toward ride-hailing and self-driving technologies. Jump will continue operating as it did so far as Uber isn’t planning to fully absorb it into its own brand, Mr. Rzepecki said.