Voi, the Stockholm-headquartered micro mobility company known for its e-scooter rentals, has raised $160 million in new funding. The round, about two thirds equity and one third debt, is led by The Raine Group.
Others participating include VNV Global, Balderton, Creandum, Project A, Inbox, and "sustainability-focused investor" Stena Sessan, along with individual backers with links to tech companies such as Delivery Hero, Klarna, iZettle, Zillow, Kry/Livi and Amazon.
Voi co-founder and CEO Fredrik Hjelm says the company -- which competes with the likes of Bird, Tier, Bolt and Lime -- has secured an "asset-backed" debt facility tied to the scooters and e-bikes it will have on its books in 2021.
The idea is that, having proven its model can be sustained, capital funnelled into the expense of purchasing the vehicles needed to expand the service, can be secured against those assets, even if they will depreciate relatively quickly over time.
“I think, going forward, we will increase the debt ratio to equity,” he tells me. “What you wanna avoid, of course, as a startup, is dilution. We want as much debt as possible because we want cash to grow because we think we can have good ROI in capital. But the debt market is usually closed for startups, until they get to a very proven business model”.
Hjelm says, as the unit economics improved, which Voi has shown by becoming operationally profitable for a few months this year on a group level, it puts the company in a position where, coupled with enough historical data, it can understand "the payback" time on vehicles. This means a financing model similar to rental car companies, or other companies with assets that have a proven value, becomes more of a possibility.
Once it's proven to work, he says in 6-9 months from now Voi hopes to be able to increase the debt facility. "Probably you will never write about Voi raising equity again," Hjelm teases, likely in reference to my scooping one of the company's earlier funding rounds.
By thinking about and funding the vehicles and the operations as two separate parts of the business, it also points to where the Voi founder believes the industry and his company in particular, is heading. "I think the direction we're going is, we're becoming more and more of a tech enabled infrastructure company," he says, comparing it to a telco or other infrastructure plays.
This makes more sense when you consider that many cities around the world are holding tendering processes and only licensing two or three and sometimes only a single provider. And it's here where Voi has also made good traction over the last year -- sped up by the Coronavirus pandemic which has forced cities to open up micro mobility services faster in order to offer an alternative to packed trains and busses.
“With major new markets, including the U.K. opening up to e-scooter mobility solutions, Voi has become Europe’s preferred operator, winning over 2/3 of city license tenders across Europe, including recent wins in Birmingham, Liverpool, Bern and Cambridge,” says Voi.
A decision on which operators are awarded London's tender is expected on December 14th. Up to three operators will be selected to operate trials, which are due to start in Spring 2021.
Voi says the new funding will be used to invest in technology platform development, fuel growth in current Voi markets and bring Voi’s latest e-scooter model -- Voiager 4 -- to more cities. In addition, Voi will use funds to further enhance the safety infrastructure of its platform, "the company’s number one priority," says the company.