Whiz Raises $3.4M for E-Bike Subscription Service for Delivery Drivers – AlleyWatch

In New York alone, it is estimated that there are over 65,000 app-based couriers. The advent of e-bikes has transformed the delivery industry, created significant employment opportunities, and is expected to continue to grow strongly. But with the average e-bike cost above $1500, the initial cost can be a barrier for mostly migrant workers with limited credit histories. Whiz is a subscription e-bike service for delivery drivers. All bikes offer 8 hours of battery life, built-in GP, ​​anti-theft system and are affordable at $159/month. His 14 months after launch, the company has his $2 million recurring revenue and maintains over 2,000 drivers at his 70% retention rate. Whiz is focused on the New York market and is expanding its business and technology with plans to expand to the 10 largest US cities next year.

alley watch Catch up with Whiz’s CEO and co-founder Mike Peregdoff To learn more about the business, the company’s strategic plans, the latest funding round, and more…

Who are your investors and how much did you raise?

It recently closed a seed round of funding, raising $3.4 million. joint journey, TMT Investments, and a group of angel investors. This brings his total funding to date to $4.5 million.

What products or services does Whiz offer?

Whiz is an e-bike subscription platform for last-mile delivery drivers, offering purpose-built e-bikes with 8-hour battery life, GPS trackers, and built-in anti-theft systems. We also offer on-demand maintenance and repair at the lowest prices in the industry. Our service allows drivers to rent e-bikes that typically cost over $1,500 for up to 20% less, providing last-mile delivery drivers with an affordable and sustainable transportation option.

What inspired you to start Whiz?

We wanted to provide an affordable and sustainable transportation option for last mile delivery drivers. We all see and meet these key workers every day, but the value they provide is often unrecognized and underestimated. We do not provide a car for our guests and often have no time or place to take a break or refreshments. If my bike breaks, I’ll be out of work with no income for days. This is often critical for contractors. To make matters worse, many drivers, especially migrant workers, have found themselves unable to afford electric bikes, which are becoming increasingly popular for their cost efficiency and agility. we had to change that. We saw an opportunity to offer rental services that are affordable and tailored to the specific needs of a growing number of private delivery drivers.

What is the difference with Wiz?

Unlike traditional e-bike rental and ownership, Whiz offers a subscription-based service specifically tailored to the needs of last-mile delivery drivers. Our subscriptions are cheaper than similar services, have longer battery life, and provide on-demand repair or replacement if a user’s bike breaks down. And with his unique Whiz Automation Platform, a proprietary ERP system for business process automation, he was able to automate key business processes and reduce operating costs by 35%. This allows us to keep our costs low and pass those savings on to our customers.

What is Whiz’s target market and size?

We focus on the fast-growing US last-mile delivery services market, which is projected to include 7 million gig delivery workers by 2025. E-bikes feel poised to capitalize on this growth due to their agility and cost. Efficient compared to other modes of transport. It’s currently focused on New York, but plans to expand to other states in the next few years.

what is your business model?

We offer subscription-based e-bike rental services with plans starting at $159/month. Our service serves drivers from Uber Eats, DoorDash and Grubhub. In other words, people who need reliable transportation to make a living. Annual Recurring Revenue (ARR) reached $2 million while maintaining 20% ​​month-over-month growth. We launched just 14 months ago, but by early 2023, we were already a profitable company at the contribution margin level.

How are you preparing for a potential economic slowdown?

The markets we serve are growing and presenting many opportunities. Adoption of electric vehicles will only accelerate, but given the economic climate, many may rely on last-mile delivery to make a living or supplement their income. I never had any problems with demand. In fact, on the contrary, the challenge for us was to provide supply. Additionally, we prioritize operational efficiency to deliver the best prices on the market. So whenever our customers are looking for affordable electric bike rentals, we will be the company they go to.

What was the fundraising process like?

As always for startups, the fundraising process was both exciting and challenging. It required good preparation, networking and persistence. We had to develop a solid business plan, prepare a pitch deck, and attend various events to showcase our company and products. But our main selling points were operational efficiency and growth. We are already profitable at the contribution margin level. So investors knew they were keeping their money in safe hands.

What was the biggest challenge you faced in raising capital?

It’s a competitive landscape, with investors tightening their belts in a recession. We had to demonstrate to potential investors that we had a unique platform that could solve them effectively. In addition to that, we also had to demonstrate the great potential of our services and the scalability of our business model. Thankfully, our early successes provided plenty of evidence of genuine demand for our services.

What factors in your business are driving investors to write you checks?

There was a combination of factors. We have a strong team with a deep understanding of our target market, a clear vision of where we want to take the company and a plan to get there. Investors were particularly impressed with his unique, in-house developed Whiz Automation Platform. This gives you a competitive advantage in the market. The combination of these factors allowed him to recognize the potential of Whizz’s business model to serve the growing market of last-mile delivery services.

There was a combination of factors. We have a strong team with a deep understanding of our target market, a clear vision of where we want to take the company and a plan to get there. Investors were particularly impressed with his unique, in-house developed Whiz Automation Platform. This gives you a competitive advantage in the market. The combination of these factors allowed him to recognize the potential of Whizz’s business model to serve the growing market of last-mile delivery services.

What milestones do you plan to reach in the next six months? Where do you see the company going now in the near future?

We are focused on intensively upgrading our Wiz Automation platform and opening new locations in New York with lounge zones, bike maintenance and repair stations, and overnight storage facilities. Our goal is to establish leadership in New York in 2023 and expand to his 10 largest cities in the US in 2024. Ultimately, we plan to serve drivers across the United States.

What advice can you give to New York companies that haven’t injected fresh capital into their banks?

Investors are now choosing more carefully which startups they invest in. They want to see real numbers and positive results, not just cool ideas that might generate profits decades from now. Show them what you earn. If you can do that, you are rich.

With so many options for commuting in the city, how do you get to work each day?

As a co-founder of Whizz, I ride my e-bike every day from my home in Williamsburg, Brooklyn to my office in Manhattan, weather permitting. A great way to stay in touch with our products and experience the city in a more sustainable way.

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