E-bike subscription service Zoomo raises $60M Series B to disrupt last-mile delivery

Zoomo, the Australian startup that builds e-bikes and offers micromobility subscriptions to gig workers and couriers, wants to be the next disruptive electric vehicle company. The startup has just announced a $60 million Series B fundraise, money it aims to use to transform the way companies look at last-mile delivery.

“We really see ourselves disrupting Rivian,” Mina Nada, CEO and co-founder of Zoomo, told TechCrunch. Rivian is an electric vehicle startup that’s building an electric SUV and an electric pickup truck — it went public last week at an implied valuation of $90 billion. “We think that it doesn’t make sense for 90% of deliveries in the United States of two kilogram burgers to be done in two-ton vehicles. And we really think that that’s going to change fundamentally to being Zoomo vehicles in the future.”

Half of Zoomo’s $60 million funding comes from equity led by Grok Ventures, Skip Capital and ArcTern Ventures, and supported by AirTree Ventures, Clean Energy Finance Corporation, Contrarian Ventures and Maniv Mobility. The equity, Nada says, will be invested directly into the platform, including software and a servicing network.

The other half comes from asset-backed debt from Viola Group, which the startup will use to scale up its hardware into existing and new markets. The company already operates in Australia, the United Kingdom and the United States, and has recently expanded into new cities in those markets, like Manchester, U.K. and Chicago, Illinois, as well as into Valencia, Spain; Paris, France; Stuttgart, Germany. The debt will allow Zoomo to pay a monthly subscription on its bikes rather than paying a large lump-sum upfront.

Many of Zoomo’s existing customers have asked the company to expand after being unable to find others to meet their needs in those markets, says Nada, so more cities are on the horizon for the startup.

Zoomo’s business is broken down into B2B and B2C elements. The startup offers fleets of electric bikes (and in some markets, mopeds), as well as fleet management software, to enterprise customers like Domino’s. It also deals directly with couriers, often through partnerships with gig worker platforms like DoorDash, that want a flexible, durable work vehicle at an affordable price. Zoomo offers gig workers a weekly subscription, which includes servicing, for anywhere from $20 per week to $49 per week.

“People are realizing we can’t hit zero emissions by continuing to just electrify vehicles, and right-sizing the form factor is a win for everybody,” said Nada. “It’s more efficient, there are faster food deliveries with less congestion. Couriers can make more money because they can do more deliveries per hour, and customers are happier because the deliveries come more quickly. We really see micromobility disrupting the traditional four-wheeled space, and we are heavily focused right now on the fact that no micromobility company is doing a really good job for the logistics space, even though there’s some cool companies doing a good job in the consumer space.”

Zoomo says its vehicles are built for couriers who have to ride eight hours per day, complete with big batteries that can carry a worker on late night slogs through the rain.

“Safety is a really big feature for them, so is durability,” said Nada, whose pedigree includes Deliveroo, Bain and Mobike. “We’ve got customers doing 50,000 kilometers per annum on a bike, so the requirements for delivery are really quite different to the consumer space.”

Companies like URB-E in the U.S. and Velove in Sweden are also trying to address the last-mile delivery space, but they’re more focused on container deliveries that can even accommodate middle-mile more than food deliveries, which is where Zoomo specializes for now. That said, with this funding round, Zoomo wants to start developing light vehicles to address parcel delivery and other urban last-mile form factors.

“Fundamentally, what this money allows us to do is to build the product muscle in our team to better research the needs of our customers,” said Nada. “We’re building the product team to now be able to do the customer research to make sure we’re replicating our success into new areas.”

Direct-to-consumer deliveries are happening increasingly from microfulfillment centers as more shopping is done online. The best way to have faster delivery is to have those fulfilment centers closer to the customer and do deliveries on smaller form factors, like e-bikes, says Nada. But different customers will have different requirements that might require different form factors down the line.

“What we’re building is a company that’s going to be able to offer those different form factors to different customer types on top of our platform of software, servicing and financing,” said Nada.

SOURCE: https://techcrunch.com/2021/11/15/e-bike-subscription-service-zoomo-raises-60m-series-b-to-disrupt-last-mile-delivery/