Swedish e-Scooter Firm Voi Technology Raises $85M in a Bid to Reach Profitability

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by Christopher Hamman · 3 min read
Swedish e-Scooter Firm Voi Technology Raises $85M in a Bid to Reach Profitability
Photo: VOI Technology / Twitter

Swedish E-scoter firm Voi has reportedly raised about $85 million in its second funding round in 8 months. The funds will be used to ramp up work on its kick scooters as well as software development.

In what has come as a shock to many pundits in investment circles, electronic scooter firm Voi Technology has reportedly raised about $85 Million in another funding round which has included several premier investment partners such as Vostok New Ventures. Previous investors Balderton Capital, Creandum and Raine Ventures were included in this round as well.

Although the firm hasn’t reached any profitability overall, it expects to achieve this in the next few years. Fredrik Hjelm, Voi’s co-founder, and CEO told:

“Already now we have seen seasonable profitability in some cities”.

He continued:

“Next year we want to have a bunch of cities that are profitable over the whole year. And by 2021-2022, we should be profitable on a company basis.”

The rapid funding round which comes less than one year after the previous one has been conducted during a time when investors have become touchy about flashy startups and ventures that have no plans for profitability with a clear-cut business model that at least holds promise for the future. 

Such start-ups usually rely on their ability to spend the money invested in them to be able to generate profits via innovation. The truth is that such innovations don’t last a few months after the first year of operations because they’re simply not integrated into the startups’ operational business model. 

Sources, however, have indicated that Voi, on the other hand, intends to speed up developments on its kick scooters to be able to extend its usability. The startup is also looking into the development of software platforms that will enable understand the location of e-scooters at all times and in all locations. This is going to assist in the determination of user behavior and even parking behavior which has been an issue in several cities across the world.

With inappropriate forms of behavior being displayed by many users of scooters across the globe, municipal authorities have made the sometimes difficult but necessary decisions to heavily regulate and sometimes outrightly ban the use of these two-wheelers.

In Singapore for example, the death of one person has led the city-state to ban the use of all scooters unless on bike paths. In places such as San Francisco, permits had to be introduced to regulate the sheer number of scooters within the city. Hjelm had this in mind when he further told sources:

“Our thesis from day one was we would be deeply integrated into the city’s transportation ecosystem,”

This, of course, can be done by working with the cities and jurisdictions in developing the right policy. Voi is going against top competitors such as Bird and Lime which were the top darlings of investors last year but are yet to make a profit so far.

On the other hand, ridesharing startups Uber and Bolt have also indicated plans to enter the scooter markets as well. This, of course, has made Voi come up with innovations that would put it at par and in most cases ahead of everyone else. One such innovation is the partnership with the German rail operator Deutsche Bahn which allows users to drop their scooters at selected locations.

With 4 million users and 14 million rides, the startup which hasn’t officially released its figures seems to be making some headway in the e-scooter marketplace. 

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