Voi secures $25m funding to fuel expansion plans

Voi, a Swedish company, has recently secured $25m in a mix of equity and debt from their current investors, after experiencing a few years of disinterest in electric scooters from investors, according to an article by Sifted.

According to a press release, Voi, which reported 68 million rides in 2023, aims to take advantage of the increasing demand from consumers and the swift consolidation in the industry.

CEO Fredrik Hjelm said that the funding allows them to grow significantly amidst the rapid consolidation occurring in the European market.

Craze for mergers

The merger of Dott and Tier, two competing scooter companies, was announced in late 2023. This was reported by Sifted in their article about the merger.

According to Hjelm, Voi is benefitting from complicated mergers such as these and the withdrawal of American competitors from the European market, as stated to Sifted.

According to Sifted, there has been a recent merger between Surf and Superpedestrian, as well as a previous merger between Tier and Dott. Additionally, there has been a larger trend in the industry, with Bird declaring bankruptcy and exiting the European market.

At the beginning, there were approximately 15-20 contenders for each bidding procedure. However, currently, the number has reduced to only three to four. This means that there are now fewer participants competing in each city. Although, we do anticipate potential mergers to increase our growth, this funding primarily aims to expand our own fleet.

Emphasis on profitability

According to the latest report from VNV Global, a large public shareholder, Voi is currently not profitable but is projected to generate an EBITDA (earnings before interest, taxes, depreciation, and amortization) that is close to breaking even.

The investor report for the company indicated that its valuation was reduced in the latest release, with an internal valuation of approximately SEK 3.7bn ($380m) in late January. This is significantly lower than the valuation of $1bn during Voi’s Series D funding round in 2021.

In 2023, Hjelm reported that the company’s group level saw its first quarter of positive EBIT (earnings before interest and taxes), with a strong focus on reaching complete profitability and generating positive cash flow.

According to Hjelm, our performance in 2023 was impressive as we saw growth in both revenue and margins. In the last two years, our revenue has increased by almost 50%, our gross profit has more than doubled, and we have managed to cut our overhead costs by almost half.

Despite Voi’s successful year, the decrease in investment multiples has been acknowledged by Hjelm. He reveals that Voi’s new post-money valuation is on par with the previous one set by VNV Global, estimated at approximately $380m.

The round saw participation from current shareholders such as VNV Global, Raine Group, Nineyards Equity, Balderton, Creandum, and Project A.