Luxury ride-hailing company Wheely is betting big on Dubai as rising demand from the region’s wealthy and digital nomads will make the city a top choice for the company.

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Wheely, a luxury-focused rival to ride-hailing giant Uber, is launching in Dubai as it looks to revive international expansion plans that were scrapped in 2020 due to the coronavirus pandemic.

The company, founded by Russian-Swiss entrepreneur Anton Chirkunov, told CNBC it will offer ride-hailing services in cities in the United Arab Emirates starting Wednesday, mainly serving wealthy customers.

As part of its Dubai debut, Wheely will offer users rides in a BMW 5 Series vehicle for the first time, a precursor to future support for the BMW i5 electric model.

This is a noteworthy step, as the i5 is cheaper than luxury electric SUV rivals such as the Mercedes-Benz EQE and Tesla Model X.

Mercedes’ 2024 EQE EV starts at $79,650, while the 2024 BMW i5 range starts at $66,800.

Wheely has never said it plans to ditch Mercedes cars anytime soon, but the move provides some insight into how the company is thinking about electrifying its fleet.

Opportunities in Dubai

Chirkunov said Wheely is targeting the Dubai market, which it has planned to enter since 2021, as the city has become a hub for wealthy businessmen from European immigrants as well as young digital nomads.

“European families and entrepreneurs have moved to Dubai over the past five years,” Chirkunov said in an interview with CNBC before the launch. “This is the most desirable destination for our guests and members. It has the most of millionaire immigrants.”

However, Wheely’s platform is more mass-market-friendly, and Chirkunov thinks his platform has a chance to stand out. It competes in a similar space to Blacklane, another company focused on luxury rides.

Chirkunov likened his product to a luxury product rather than a general service to consumers. He compared the Wheely brand’s brand status to that of American Express’ Centurion and Platinum membership credit cards.

Wheely, based in London, is a startup that offers a ride-hailing app similar to Uber, but targeting high-net-worth clients. For example, the average ticket price for a 30-minute journey from Mayfair to the City of London is around £46 ($57.72).

Price isn’t the only “high-end” thing about Wheely. The company provides trained drivers to greet passengers, collect luggage and take other steps to make passengers feel special.

Users can make specific requests to drivers on the Wheely app, such as asking the driver to collect flowers for their loved ones before they get in the car.

Wheely even has its own tailor-made “Driver Academy” program to train drivers. The plan is already underway at Seon House, the Duke of Northumberland’s stately home in London.

Whalley is now replicating this model in Dubai.

Its members-only service – which users can only access by invitation or after taking 15 trips on the app within six months – offers more advanced services, including access to Mercedes-Benz equipped with – First-class service on Mercedes-Benz S-Class vehicles: bath towels and the option to book a full-day chauffeur.

From COVID-19 collapse to global expansion

Wheely is relaunching its international operations in Dubai after a tumultuous few years.

When the coronavirus lockdown happened, Whalley had a tough time.

“This pandemic has been difficult because unlike companies like Amazon, whose order volumes have skyrocketed in the pandemic, our order volumes are down 99%,” Chirkunov said.

Since then, however, demand from high-end customers has rebounded.

He said the platform had recently achieved operating profitability in all but new markets such as Paris and Dubai.

Back in 2020, just before the pandemic, Chirkunov In an interview with CNBC, he said he plans to raise $30 million in new funding to begin expansion into the United States

When asked if Whaley decided to raise more cash, Chirkunov revealed that the company had discreetly raised an additional amount internally from existing shareholders.

The previously undisclosed funding totaled $15 million, bringing the total cash raised by Wheely to date to $43 million.

Wheely’s existing shareholders include venture capital firms Concentric and AdFirst.vc, as well as Chirkunov himself.

Wheely exclusively told CNBC that the company plans to expand its Middle East team and driver network to more than 1,000 people over the next three to five years.

Wheely’s revenue for the 2021 financial year was £22.5 million, according to Companies House filings.

The company remained loss-making at group level, reporting a loss of £6.1m. The number of employees increased significantly from 157 to 221.

Next comes U.S. expansion

However, the Middle East is not the only stop on Wheely’s global expansion route. Wheely’s co-founder and CEO told CNBC that the startup earlier launched its service in Paris and now plans to expand operations in the United States.

Chirkunov said the pandemic disrupted Whaley’s short-term plans to enter the U.S. market, so Dubai “overtaken” the U.S. in the company’s focus.

Now, though, he’s aiming to eventually launch it in the United States.

“We have a lot of North American travelers using Wheely, especially for transfers and flights,” Chirkunov said. Wheely’s app enables its network of drivers to instantly check for updates on passenger flight status.

“We are still considering launching in the United States at some point,” Chirkunov added. “The reason we haven’t launched yet is that we have been focused on Dubai.”

But eventually, Chirkunov said, “New York will replace London as our largest market.”

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