Ubco, the New Zealand-based electric bike startup, has raised $ 10 million to fund a global expansion focused on the US market and expand its commercial subscription services business.
Ubco’s flagship product, the Ubco 2X2, is a four-wheel drive electric motorcycle that looks like a dirt bike but rides like a moped. What started as a solution for farmers to get around pastures and farms easily, safely and quickly has expanded to include an urban version of the bike that accommodates fleet company customers, gig workers economy and city cyclists.
Since its founding in 2015, the company has produced two versions of its 145-pound utility bike: the Work Bike, the original off-road vehicle, and the Adventure Bike, the newer version that is made for urban riding but can ride alone. . road.
Now that Ubco got a fresh injection of cash from the round led by Seven Peak Ventures, Nuance Capital and TPK Holdings, it expects to continue expanding into existing verticals such as food delivery, postal service and last-mile logistics. The company already works with Domino’s in New Zealand and the UK, as well as a variety of other national clients, such as the New Zealand Post, Defense Force, the Department of Conservation and Pāmu, or Landcorp Farming Limited and other local restaurants and eateries. stories.
“We have a strong business market in New Zealand and have developed a strong international sales portfolio,” Timothy Allan, CEO and co-founder, told TechCrunch.
While direct-to-consumer sales account for the majority of Ubco’s revenue today, the company is aggressively pushing the business and, more specifically, subscription services. The 2X2 is built on an intelligent platform that includes vehicle and power systems, cloud connectivity and data analytics, allowing the subscription model to work in conjunction with fleet management systems.
Ubco expects revenue to grow from $ 2.1 million in 2020 to $ 8.4 million by the end of 2021 as it pushes to increase its annual recurring revenue through subscriptions. Ubco’s subscription model, which costs $ 50- $ 60 per week ($ 75- $ 85 NZD) for business fleet customers, is rolling out in New Zealand, Australia, the UK, Europe and the US. This year and in 202. Consumers will also have access to subscriptions in the coming months, according to a company spokesperson.
Allan sees subscriptions as the future of the electric vehicle industry, not only because it allows a high probability of profitability, but also because it is much more environmentally sustainable. As the company expands this part of its business model, it hopes to lead the circular economy space.
The company predicts that vehicles running on the subscription model will have four times the life expectancy of those sold outright and will produce 80% less carbon overall compared to a combustion vehicle.
“Subscription means we own the vehicle, so we manage the lifecycle,” Allan said. “So the first life starts with high intensity, and that could be 60,000 kilometers delivering pizza, or 30,000 kilometers on a farm, which are equally difficult for different reasons. Then that vehicle will switch to a lower intensity application. After that, the battery can be removed and that could go into passive solar storage or something like that. “
Allan sees solving the end-of-life problem as a personal and professional challenge, one with room for creativity, as no one has fully figured out the correct way to do it. It says it takes a bottom-up approach when it comes to engineering the vehicle in a way that allows for easier recycling.
“Like when designing a battery, to hell with putting fire retardant foam on it because it can’t be recovered at the end of its useful life,” he said. “So you start with the correct labeling, engineering with the intent to design for this type of assembly, and then your business or commercial system should support the concept. Now, we have the upper hand because the economics and incentives are aligned, and all of that is aligned with New Zealand’s product stewardship legislation. “
Trying to perfect the circular economy through utility vehicles isn’t just about doing what’s right for the environment. Allan believes that in the end it will be a smart business decision, one that will attract customers and give the company a competitive advantage with business customers.
“This is part of your journey with us as a customer,” Allan said. “If we can design the subscriptions and the life of the vehicle in such a way that you feel good, that’s where we are driving. Most people want to do the right thing and we can offer something that logically fits the economy, can be done at scale and can be managed holistically. “