Mottu, a São Paulo-based motorcycle rental startup, has raised $30 million in equity in a Series B round of funding.
The company, which aims to give independent couriers a way to work for logistics and food delivery apps, also secured $10 million in debt financing. Most, if not all, the workers have little to no, or bad, credit, so purchasing a motorcycle outright is not an option.
Mottu started operations in early 2020 with a fleet of 200 motorcycles in its home city of São Paulo. By year’s end, it was up to 1,000 motorcycles and $2 million in annual recurring revenue (ARR). Today, the startup operates in eight Brazilian cities and Mexico City with a fleet of 10,000 motorcycles. It grew its ARR by 5x in 2021, which means that it had reached $10 million in ARR by the end of last year, according to CEO and founder Rubens Zanelatto.
Verde Asset, one of Brazil’s largest investment management firms, provided the debt portion of the company’s latest financing. That capital, Zanelatto said, kicks off Mottu’s plan to quadruple its fleet by year’s end and reach 50,000 motorcycles by 2023.
Over time, Mottu has evolved its model and does much more than just rent motorcycles. It also provides credit, insurance, maintenance and 24-hour support for its renters. And for those aspiring to become couriers, Mottu also provides a driving school.
Its latest raise follows a $20 million Series A financing in early 2021, which Zanelatto said allowed the company to significantly grow its fleet, expand geographically and build out its own delivery offering — which over 1,000 retailers are using. Motto plans to use its new capital in part to hire more than 50 senior engineers, as well as a chief technology officer (CTO), adding to its current headcount of 400.
Notably, Base Partners and Crankstart — a San Francisco-based family foundation founded by Harriet Heyman and Sequoia Capital Partner Michael Moritz — co-led the equity portion of the company’s funding. Tiger Global Management participated in both Mottu’s Series A and Series B rounds.
For the unacquainted, Moritz has backed the likes of Google, LinkedIn, PayPal, Yahoo, Stripe, Klarna and Getir. Crankstart was formed to “address social issues and their underlying causes.”
Indeed, Mottu’s model does aim to solve a number of social problems in Latin America: unemployment and crime.
“Our customers are unemployed people with very bad credit score ratings,” Zanelatto told TechCrunch. “Those people can’t go to a dealer store and buy or lease a motorcycle to work as a courier. And we solve all the bottlenecks that couriers have in their working journey. We are trying to get our business model to be a no-brainer decision for a courier.”
Mottu’s customers pay the startup a weekly rental fee that amounts to about $150 per month, prompting the startup to describe its offering as a “Hardware-as-a-service.” Its customers, said Zanelatto, on average make more than minimum wage — which is $300 per month in Brazil.
Also, in Brazil, there has been a spike in reported robberies carried out by fake couriers. Mottu’s branded and tracked motorcycles “represent an extra layer of safety for everyone,” Zanelatto said.
What about the risk of renting to people who have low credit scores? Incredibly, the company thus far has zero delinquency rates.
“If they don’t pay us, we block the bike,” Zanelatto told TechCrunch. “As they need the motorcycle to keep making money, they want to pay us.”
Fernando Spnola, partner of Base, told TechCrunch via email that he views Zanelatto as a “frugal and down-to-earth founder who was able to dream big while keeping his feet firmly on the ground and eyes focused on creating a capital efficient business.”
“Rubens has taken a novel approach to the last-mile problem and created a solution focused on the supply,” he added. “By putting the courier at the center, Mottu is not only doing good by them but also building a robust business and a technology platform to advance online commerce and logistics in Brazil.”
He also believes that “drastic changes are underway in how merchants streamline their online commerce in the post-pandemic economy.” As such, Spnola’s view is that Mottu is uniquely positioned “to lead the way as a central piece of the internet economy in LatAm.”
“Many SaaS solutions are being created in LatAm to help the small and medium merchant to operate online, the truth is there is no viable online commerce without reliable logistics, which is the hardest piece of the equation,” he added.
Mottu is not the only venture-backed Brazilian startup on a mission to help people find employment opportunities via a rental model. São Paulo-based Kovi operates its “all inclusive” car subscription model under the premise that more people in Latin America would work for ride-hailing companies if they could afford to operate the necessary vehicle. That startup last August raised $104 million in a Series B round of funding.
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via Tech News Digest
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