Subscription e-bike startup Zoomo cuts jobs again after raising $24 million

- May 2, 2023 2 MIN READ
Zoomo, Mina Nada & Michael Johnson
Zoomo cofounders Mina Nada & Michael Johnson
Electric delivery bike startup Zoomo has cut staffing for the second time in six months, making 27 roles redundant, just weeks after the collapse of major client Milkrun.

“Zoomo has made the difficult decision to reduce its overall headcount by 8%. The restructure will accelerate our path to company-wide profitability in 2024,” a statement from the company said.

“It primarily affects employees in our corporate head office, as we bring central overheads in line with regional profit.”

The job cuts come after the cash hungry business sured up its balance sheet with a previously undisclosed $24 million raise from existing backers to hopefully give it enough runway to achieve profitability over the next 12 months.

The round was led by Grok Ventures, the family VC fund of Atlassian’s Mike Cannon-Brookes, and the federal government-backed Clean Energy Finance Corporation. The company said the investment “underscores the strength of Zoomo’s underlying business model” in micromobility.

Zoomo previously cut 16% of its workforce, around 65 people, in mid-October last year, with cofounder and CEO Mina Nada saying at the time that “we’re witnessing an increasingly challenging macro-economic environment with increased risks of softened demand and tighter capital”, which meant “an adjustment in our strategy and cost-base”.

Fast forward 28 weeks, amid the demise of a slew of food delivery startups, including clients Milkrun, which shut down in early April and Deliveroo pulled out of Australia last November, the fleet subscription venture has cut its cash burn again.

The venture started out as Bolt, a side hustle for Nada, an ex-Deliveroo and Mobike executive and his former Bain & Co colleague Michael Johnson. They went full time on it in 2019 and rebranded to Zoomo in August 2020.

Zoomo’s e-bikes are targeted at the last mile delivery – the gig economy workers and companies delivering food and other products as part of the urban supply chain. Its client base includes UberEats, Doordash and Domino’s, with operations in 16 cities on three continents, including Brisbane, Sydney and Melbourne, as well as Germany, the UK, France and Spain, Canada and the US.

Since 2020, more than 80% of Zoomo’s revenue has been generated from outside of Australia, with 2022 delivering revenue growth of 112%.

A Zoomo spokesperson said that in 2022 the business had positive gross margins and country level profitability.

In just over two years during the pandemic era of cheap and fast-flowing capital, Zoomo raised around $140 million, kicking off with $16 million in August 2021 then another $16 million in a Series A eight months later. Only six months had passed before Atlassian’s Cannon-Brookes and Scott Farquhar backed Zoomo’s $80 million Series B through their family VCs, Grok and Skip Capital, in November 2022.

Just three months passed before investors poured in another $28 million in a Series B top up.

Zoomo’s cap table also includes AirTree Ventures, the Clean Energy Finance Corporation (CEFC), Contrarian Ventures, Maniv Mobility, New York VC Collaborative Fund; MUFG Innovation Partners,  the VC arm of Mitsubishi UFJ; local mobility solutions company SG Fleet; WIND Ventures, the VC arm for Latin American energy and mobility business COPEC; and Akuna Capital.

Over the past four years, Zoomo has rationalised its fleet and now offers two types of e-bike for riders, bother with 60km range, and top speed of 25km/h, costing $39 a week to rent.

For companies there is a choice of an e-bike, two e-mopeds, with ranges of 90km and 160km, and an e-quad.