German media giant Axel Springer has acquired a stake in the taxi-hailing app Uber, both parties confirmed on Wednesday. The size of the stake wasn’t disclosed, but it was said to be “minimal” and similar to the group’s investment in AirBnB, another sharing app, which was announced in 2012.
The investment hadn’t previously been publicized and was revealed by t3n.de, a German tech news website. A spokeswoman for Axel Springer told the site it was “a financial participation, not a strategic investment.”
The investment comes as Uber struggles to find a solid footing in Europe.
Axel Springer has been building its presence in the digital landscape over the past few years. It launched Upday, a news aggregator, at the start of 2016, and recently announced plans to expand the app from four to 16 European countries.
The group also owns the German online news platform N24, which it merged with newspaper Die Welt, and bought a controlling stake in the New York-based Business Insider, a fast-growing financial news website that attracts younger digital natives.
The acquisition of a stake in Uber represents a further move to diversify its holdings and seek partnerships with companies – especially start-ups – in Silicon Valley. It was reported that Kai Diekmann, the former editor-in-chief of Germany’s biggest tabloid Bild (also owned by Axel Springer), had been acting as an advisor to Uber.
The investment comes as Uber struggles to find a solid footing in Europe. Its expansion plans have stalled amid a series of legal battles, usually centering on the company using unlicensed drivers.
Yesterday, for example, a Czech court upheld a complaint banning the company from operating in the country’s second largest city, Brno. The court ruled that Uber’s drivers hadn’t passed tests, and that their vehicles weren’t kitted out with taxi meters, both of which are required by Czech law.
In Germany, meanwhile, Uber has been forced to scale back its operations after failing to compete with local rivals. The company’s low-cost service, UberPOP, has been banned nationwide. Uber says it is instead focusing on its tie-ups with licensed drivers, but this is now limited to just Berlin and Munich after the company pulled out of other cities.
Without responding directly to questions about Axel Springer’s investment, Uber said in a statement that it was “committed to providing reliable and accessible transportation that improves European cities by cutting congestion, pollution and parking.”
The company also cited a deal with German car manufacturer Daimler, struck in January, as an example of its European partnerships. That deal will see Daimler introduce its self-driving cars into Uber’s fleet “in the coming years.”
Last week, Uber admitted it had made losses of $2.8 billion in 2016, despite doubling its gross bookings to $20 billion. The news will worry investors, whose money has lifted the value of the company to $68 billion.
Jonathan Crane is an editor with Handelsblatt Global.