Yahoo Finance Meet the newly-minted unicorn founder transforming school buses for 27 million U.S. students
Good morning, Broadsheet readers! New research finds that women are often judged negatively for making connections with higher-ups, Stanford researchers believe they've uncovered why women are more prone to autoimmune diseases, and there's a new unicorn on the block. Have a relaxing weekend.
- Picking up. In a tough market for startups, we're hearing more about unicorns shutting down than new ones joining the herd. But a female-founded company joined the ranks of the unicorns this week with an unusual business: school buses.
Zum, founded and led by CEO Ritu Narayan, raised a $140 million Series E round, with a new valuation of $1.3 billion. The round was led by Singapore-based investment firm GIC, with participation from Sequoia and Softbank.
Narayan came up with the idea for a school bus startup a decade ago, inspired by her struggle getting her kids to and from school while she worked at eBay. "This problem is generational, it's beyond me," she says she realized. "I need to do something about it."
What started as a way to improve pick-up and drop-off for parents evolved into a complex business involving AI, electric vehicles, and public-private partnerships with school districts.
The Oracle alum, 50, grew up in India and moved to the U.S. at 25. She identified student transportation as a $50 billion industry—"the largest mass transit system in the U.S."—serving 27 million students that had "never been disrupted before." "This industry has not changed in 80 years," she says.
Zum's tech-enabled school bus fleets give parents insight into children's whereabouts via an app and allow buses to be used for purposes other than morning and afternoon transit, rather than sitting empty the rest of the day. Zum aims for the buses to "connect back to the grid" to provide energy when not in use. The startup relies on AI to "optimize routes." Narayan says Zum reduced the number of school buses in San Francisco from 236 to 193 and reduced commute time for students.
Narayan didn't have experience in EVs before building Zum, but she realized that the school bus is "the ideal asset to be electrified." "It's the largest battery on wheels," she explains. "It's four-to-six times the EV car battery, and it has a very predictable commute pattern. It travels locally and it's not utilized in peak demand for energy during the evening or summer."
Currently, the Bay Area-based company has about 2,000 employees and provides transportation for 4,000 schools in the U.S.
Narayan advises other founders looking for their unicorn idea in a bleak market to "always to solve a real customer pain point." That's how she founded her company—although almost five years in she made the tough call to switch its business model. "I was very tied to my personal story. That was my founding story," she says. "But I knew the right thing to do for the company was to evolve."
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
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