Whizz raises $3.4 Million in seed funding to expand e-bike subscription platform for delivery drivers.

Whizz, an e-bike subscription platform for last-mile delivery drivers, has secured $3.4 million in seed funding from Joint Journey, TMT Investments, and a group of angel investors. The latest investment brings the company’s total funding to $4.5 million.

According to the company, the funds will be used to support the company’s growth, upgrade the Whizz Automation Platform, and establish new locations in New York equipped with bike maintenance and repair stations, overnight storage facilities, and lounge zones.

With the last-mile delivery services market predicted to comprise seven million gig delivery workers by 2025, the e-bike market is expected to benefit from this exponential growth. Compared to other forms of transportation, e-bikes offer greater agility and cost efficiency. However, the average cost of an e-bike is over $1,500, which many drivers, particularly immigrant workers without a credit history, cannot afford.

Whizz is offering a more affordable solution, enabling drivers to rent purpose-built e-bikes featuring 8-hour battery life, GPS trackers, and built-in anti-theft systems, as well as on-demand maintenance and repairs.

This unique subscription model is aimed at making e-bikes accessible to more delivery drivers, reducing their reliance on more traditional and expensive forms of transportation.

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.

The company aims 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.

“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.

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