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(Reuters) - London-based taxi hailing app Hailo said it is pulling out of the United States and Canada as it becomes impossible to be profitable because of "the astronomical marketing spend required to compete," the company said.
As a result, 40 people will leave the company including founder and co-Chief Executive Officer Jay Bregman. He remains a significant shareholder.
Hailo said it will concentrate on expanding its business in Europe and Asia.
Launched in November 2011, Hailo is available in more than 20 cities and is funded by Union Square Ventures, Accel Partners, Wellington Partners, Atomico Ventures and Sir Richard Branson.
Hailo's business model attempts to build a community out of taxi cab drivers who support the app. While many apps focus on the customer's functionality, Hailo claims to put more emphasis on the drivers.
U.S. startup Uber, one of Hailo's competitors, has had skirmishes with taxi operators and local authorities in many cities where it operates. It was banned by German courts in September, after it tried to launch its new ride-sharing service UberPop - which links private drivers with passengers - saying it did not comply with German laws on the carriage of passengers.
Later, Uber said it would start its UberTaxi service - which uses regular taxi drivers to pick up rides in their down time.
(Reporting by Ankush Sharma in Bangalore; Editing by Cynthia Osterman)