June 28, 2021
EXCLUSIVE: A former McKinsey partner raises $45 million to take on Uber with a very different ride-hailing business model
Alto, a Dallas startup, is trying to build the Starbucks of the ride-hailing world by offering a premium taxi service that in many ways flies in the face of what Uber and Lyft have built. Now it has a new round of cash to prove it out, Insider has exclusively learned.
The company, led by CEO Will Coleman, a former McKinsey partner, recently raised $45 million in a Series B funding. The round was coled by Tuesday Capital, an early Uber investor formerly known as CrunchFund, and Goff Capital, a Texas private-investment firm. The mutual-fund giant Franklin Templeton also invested. The round brings Alto's total fundraising to $60 million.
That may seem a paltry sum compared with the billions of dollars that have poured into Uber and Lyft over the years, but Alto is trying to build a model that runs counter to its cash-burning competitors. The startup owns its fleet of cars and employs drivers as W-2 workers, rather than using contract labor. Alto plans to use the new capital to build its fleet and transition it to 3,000 fully electric vehicles in the next two years and expand into more markets.