Yulu to re-focus on people mobility after $80 mn expected funding push

The Bengaluru-based startup is looking to launch its series C round for $70-$80 million next quarter, after just having raised $19 million from existing backers Bajaj Auto and Magna.
The Bengaluru-based startup is looking to launch its series C round for $70-$80 million next quarter, after just having raised $19 million from existing backers Bajaj Auto and Magna.

Summary

  • Eyeing profitability by next quarter, Yulu says Bajaj partnership to offer co access to international markets, R&D
  • Company says it is optimistic market for low-speed electric scooters, currently a small & unorganized segment, will grow in India even without govt support

New Delhi: Bajaj Auto-backed electric ride-sharing platform Yulu, which started off as an e-bike rental company but pivoted to goods transport in the aftermath of the pandemic, is looking to get back to moving people around, through a big supply push it'll make after it closes a Series-C funding round.

The Bengaluru-based startup is looking to raise $70-$80 million next quarter in a Series-C round, after having just received $19 million from existing investors Bajaj Auto and Magna.

While Yulu's pivot to facilitating last-mile deliveries paid off, with the segment now accounting for 80% of its revenues, it is now looking to double down on its original founding principle - e-bike rentals for people by the minute, which according to co-founder Amit Gupta, generate positive unit economics for the business, better than its deliveries business.

The company has a fleet of 30,000 vehicles comprising the Yulu Miracle (for people mobility), and Yulu Dex (for deliveries) in Bengaluru, Delhi-NCR and Mumbai. It also has a network of over 120 battery swap stations operated by its battery-as-a-service arm Yuma.

"Today, people mobility is only 20% of the business, but we do see, in a steady state, that number will be at least 40%, if not more, of our revenues. The moment we stabilize and set our profitability milestones, which should happen next quarter, we will actually scale the people mobility business once again. We do not need a new product, as our people mobility piece is suitably addressed using the Yulu Miracle", Gupta told Mint.

"Miracle is the perfect product which we have kind of defined over the last 4-5 years and we are very happy with it. We generate positive unit economics from that business already, and we see no reason for us to tweak that. I think there will be minor improvement, but there is no fundamental change in terms of the product look and feel. The money that we have raised currently, a large portion of that will get used to increase the supply and we will also use a portion of this money to support the balance sheet so that we can raise debt money. We are raising debt every month or quarter as we need funding to purchase the assets (the vehicles", he added.

While Yulu currently operates on a shared-mobility model, it is also venturing into retail segment, where it wants to sell scooters directly to end-customers. However, India doesn't have a robust market for low-speed electric scooters at present, as the central government and most state governments have pulled subsidy support from the vehicles in favour of high-speed electric two-wheelers which typically substitute internal combustion engine scooters. However, according to Yulu, the category in India is ripe, and can become sizeable as the government pulls the plug on subsidies down the line across segments.

"We are talking about one more business line called personal mobility. We want to actually sell the scooter to the end-consumer and will basically double down on that once we raise our Series C...fast-forward that, let's say two or three years down the line, our people mobility business will also pace up to the right level", Gupta said.

Yulu sees deepening "synergies" with two-wheeler maker Bajaj Auto, which exports its products to more than 70 global markets.

"We see with the help of Bajaj, we can launch a Yulu-like business in other markets as well. So capital-infusion is one thing, but I think more than capital-infusion, Bajaj's deep understanding of the India landscape and their value engineering - getting products ready at a very competitive price, which ticks all of the boxes on safety and TCO (total cost of ownership), and of course expansion outside of India, that's the value they will bring", he said.

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