After a couple of years of investors turning their backs on electric scooters, Swedish Voi has announced raising $25m in a combination of equity and debt from existing investors.
Voi, which says it had 68m rides in 2023, wants to “seize the opportunity presented by growing consumer demand and the rapid consolidation in the industry,” according to a press release.
“Amid the rapid consolidation in the European market, this financing puts us in a great place to expand,” the CEO Fredrik Hjelm said.
Merger madness
In late 2023 rival scooter companies Dott and Tier announced they were merging.
Hjelm tells Sifted that complex mergers like these, as well as US competitors exiting the European market, are helping Voi.
“There is both the merger of Tier and Dott and the more recent merger of Surf and Superpedestrian but also in a broader perspective, with Bird filing for bankruptcy and leaving Europe,” he tells Sifted.
“When we started there were about 15-20 competitors in each tender process — now we are down to three to four. So there are a lot fewer actors per city that compete. We do, however, see further consolidation possibilities to grow but this capital is mainly for our own fleet expansion.”
Profitability focus
Voi has not reached profitability but is expected to report an EBITDA (earnings before interest, taxes, depreciation, and amortisation) around breakeven, according to large public shareholder VNV Global’s latest report.
The company’s valuation was still marked down in its latest investor report, which stated an internal valuation of around SEK 3.7bn ($380m) in late January compared to about $1bn when Voi raised its Series D in 2021.
According to Hjelm, the company achieved its first quarter of positive EBIT (earnings before interest and taxes) at the group level in 2023, and the company is focused on achieving full profitability and positive cash flow.
“We had a strong 2023 where we continued to grow alongside improving margins on all levels,” Hjelm said. “Over the past two years, our revenue has grown by nearly 50%, our gross profit has more than doubled, and we've reduced overhead costs by almost 50%.”
But even if Voi has had a good year, investment multiples have come down and Hjelm says that the new post-money valuation for Voi is similar to the one that VNV Global set – around $380m.
Existing shareholders, including VNV Global, Raine Group, Nineyards Equity, Balderton, Creandum and Project A participated in the round.
