Voi Raises $160M in Funding for Micromobility Expansion

Voi, a leading micro mobility provider headquartered in Stockholm, Sweden, specializing in electric scooter rentals, has successfully secured $160 million in a new investment round. This funding consists of approximately two-thirds equity and one-third debt, with The Raine Group leading the investment.

Additional investors participating in this round include VNV Global, Balderton, Creandum, Project A, Inbox, and Stena Sessan, an investor focused on sustainability. The round also saw contributions from individual investors connected to prominent technology companies like Delivery Hero, Klarna, iZettle, Zillow, Kry/Livi, and Amazon.

Fredrik Hjelm, co-founder and CEO of Voi, states that the company – a competitor to firms such as Bird, Tier, Bolt, and Lime – has obtained an “asset-backed” debt facility. This facility is linked to the e-scooters and e-bikes the company will possess throughout 2021.

The strategy behind this approach is to leverage the proven viability of its business model to secure funding for vehicle purchases needed for service expansion. These funds are secured against the value of the vehicles themselves, despite their expected depreciation over time.

“Looking ahead, we anticipate increasing our debt-to-equity ratio,” Hjelm explains. “Startups naturally aim to minimize dilution, and we prefer utilizing debt to finance growth, as we believe we can generate a strong return on investment. However, the debt market is typically inaccessible to startups until they demonstrate a well-established business model.”

Hjelm notes that improvements in unit economics, demonstrated by Voi achieving operational profitability at a group level for several months this year, have positioned the company to accurately predict the “payback” period for its vehicles. This allows for a financing structure similar to those used by rental car companies or businesses with demonstrably valuable assets.

If this model proves successful, Voi anticipates expanding the debt facility within the next 6-9 months. “You likely won’t be reporting on Voi raising equity funding again,” Hjelm suggests, referencing a previous funding round that was initially reported by the author.

By treating vehicle funding and operational expenses as distinct components of the business, Voi’s founder highlights the direction he believes the industry, and his company specifically, is taking. “We are evolving into a technology-enabled infrastructure company,” he states, drawing a comparison to telecommunications companies or other infrastructure-based businesses.

This perspective is reinforced by the increasing trend of cities worldwide implementing competitive tendering processes, often licensing only two or three, or even a single, provider. Voi has experienced significant success in these tenders over the past year, a trend accelerated by the Coronavirus pandemic, which prompted cities to rapidly adopt micro mobility options as alternatives to crowded public transportation.

“Voi has become the leading operator in Europe, securing over two-thirds of city license tenders across the continent, including recent wins in Birmingham, Liverpool, Bern, and Cambridge,” according to a statement from Voi, particularly with the opening of the U.K. market to e-scooter solutions.

A decision regarding the operators selected for London’s tender is expected on December 14th. The trials, involving up to three operators, are scheduled to begin in Spring 2021.

Voi states that the new funding will be allocated to the development of its technology platform, supporting growth in existing markets, and deploying its latest e-scooter model – the Voiager 4 – to additional cities. Furthermore, the funds will be used to enhance the safety features of its platform, which the company identifies as its “number one priority.”