Whizz raises $3.4M to grow its e-bike rental platform for last-mile delivery drivers
The US last-mile delivery services market has seen explosive growth in recent years. It is estimated that the market will increase to about seven million gig delivery workers by 2025.
Currently, the majority of delivery services don’t offer vehicles, leaving many drivers unable to afford the cost of a $1,500 e-bike, particularly immigrant workers who may not have a credit history and do not meet the criteria for a loan. That’s why one startup is on a mission to address the challenges faced by these drivers.
Enter Whizz, a New York-based startup that offers an affordable alternative, enabling drivers to rent purpose-built e-bikes offering 8-hour battery life, GPS trackers, and built-in anti-theft systems, as well as on-demand maintenance and repairs.
To further the increasing demand for its services, Whizz announced today it has raised $3.4 million in a seed round of funding from Joint Journey, TMT Investments, and a group of angel investors. Whizz will use the fresh capital infusion to fuel its explosive growth, upgrade its Automation Platform, and set up new locations in New York equipped with lounge zones, bike maintenance, and repair stations, and overnight storage facilities.
Founded in 2021 by CEO Mike Peregudov and CPO Ksenia Proka, Whizz is an e-bike subscription platform that offers long-range e-bikes, on-demand maintenance, and same-day replacements for last-mile delivery drivers powered by its unique Whizz Automation Platform. The company operates in New York and works with drivers from the biggest names in last-mile delivery such as Uber Eats, Doordash and Grubhub.
With subscriptions starting from $159/month, Whizz is 20% cheaper than competing services. The company is able to maintain its market-leading prices using the Whizz Automation Platform, which has enabled it to automate key business processes and reduce operational costs by 35%.
As a result, just 14 months after launching, Whizz has reached $2M in Annual Recurring Revenue (ARR) and has sustained 20% month-over-month growth. The rental service has been used by more than 2,000 delivery workers since its inception, including drivers from Uber Eats, Doordash, and Grubhub, with over 70% of users renewing each month and 90% willing to recommend the service to others.
“At Whizz, our guiding principle is that every cent saved is a cent earned. The company has achieved a 300% annual growth rate and is on track to continue this trend in 2023. However, providing operational excellence and becoming the most efficient company in the e-bike rental market remains our primary focus,” — said Mike Peregudov, co-founder and CEO of Whizz.
“Our success is driven by being mindful in our approach, closely monitoring our expenses, and improving the efficiency of every process. The only thing we have invested heavily in is the Whizz Automation Platform, which is continuously helping us to reduce costs even further. Our efforts have provided a return of best-in-class operational efficiency and strong profitable unit economics at the beginning of this year — we have already become profitable on the contribution margin level. We intend to not only maintain these positive results but to further improve the efficiency of Whizz as we expand to other cities in 2024,” — added Ksenia Proka, co-founder and CPO of Whizz.
“Whizz challenges the substantial and fast-growing last-minute delivery market, which requires both the ability to scale rapidly and the ability to remain efficient. I firmly believe that the founders of Whizz, who have previously built and exited two successful companies in the same space, are incredibly well positioned to achieve this goal,” — said Sergey Dashkov of Joint Journey.