Whizz – an e-bike subscription platform for last-mile delivery drivers – announced that it has raised $3.4 million from Joint Journey, TMT Investments, and a group of angel investors in a seed round of funding. This investment brings the company’s total fundraising to date to $4.5 million.
The funding round will be used to fuel the company’s explosive growth; intensively upgrade the Whizz Automation Platform, which is its one-of-a-kind ERP system for business process automation; and set up new locations in New York equipped with lounge zones, bike maintenance and repair stations, and overnight storage facilities.
The US last-mile delivery services market is growing exponentially and it is predicted to comprise 7 million gig delivery workers by 2025. And offering greater agility and cost efficiency than other forms of transport, the e-bike market is primed to capitalize on this growth.
But the average e-bike costs over $1,500, which many drivers — often immigrant workers without the credit history to gain approval for a loan — simply cannot afford. And Whizz offers an affordable alternative, thus enabling drivers to rent purpose-built e-bikes offering 8-hour battery life, GPS trackers, and built-in anti-theft systems, and on-demand maintenance and repairs.
With subscriptions starting at $159 per month, Whizz is 20% cheaper than competing services. And 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%.
Just 14 months after launching, Whizz has reached $2 million in Annual Recurring Revenue (ARR) and has sustained 20% month-over-month growth. And the rental service has been used by over 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.
The company is aiming to become the top choice for delivery drivers in New York by opening new locations and providing additional services, before expanding to other geographies ahead of its Series A funding round in 2024.
KEY QUOTES:
“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.”
– 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.”
– 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.”
– Sergey Dashkov of Joint Journey
