Mottu raises $40 million to rent 50,000 motorcycles

Mottu raises $40 million to rent 50,000 motorcycles

Mottu — the motorcycle rental startup for delivery couriers — has just raised $40 million in a round that is expected to take it to more than 50,000 leased motorcycles by the end of next year.

The round was part of equity, part in debt.

the share of equity was co-led by the same investors who had led Series A a year ago: Base Partners, a Brazilian asset manager, and Crankstart, the fund owned by Michael Moritz, a partner at Sequoia Capital. (Mottu is Moritz’s only investment in Brazil.)

The debt portion was led by Verde Asset, and was designed in a tranches. Mottu will be able to call in more capital as needed – and if its results are satisfactory.

The debt will only be used to buy new motorcycles, which will be the collateral for the loan. The other funds from the round will mainly finance investments in technology, with the hiring of at least 50 engineers and a CTO. investments in tech will help Mottu improve the automation of all its processes, such as fleet management, generating operational efficiency.

“We decided to do the part of the investment in debt assets to make the business much more scalable and improve the capital structure,” founder Rubens Zanelatto told the Brazil Journal.

Mottu has grown at an impressive pace, surfing one of the great trends of the pandemic: the increase in delivery of restaurants.

In 2020, when it made its seed round, Mottu only had 160 bikes and plans to reach 1,000 by the end of the year. Now, the startup already has more than 10,000 motorcycles running in eight Brazilian cities and made a annual recurring revenue (ARR) of US$ 10 million last December. (Yesterday, she rented her first motorcycle in Mexico City, kicking off her international expansion.)

Basically, Mottu buys the bikes at scale and at a discount, and then monetizes the assets with a monthly rental (payment is made weekly to match the apps payment flow).

One difference between Mottu and companies like Localiza and Movida is that the startup does not have a business of resale. She uses the motorcycles to their maximum capacity, and then demobilizes the asset (including using parts from old motorcycles to replace the fleet in circulation).

According to Rubens, Mottu’s differential for motoboys is that it allows them to earn more from their deliveries without worrying about issues such as maintenance, theft and insurance. The startup also created Mottu Delivery, a platform that connects motoboys with restaurants and retailers interested in hiring their services.

The funding comes at a time when capital rounds at startups are becoming increasingly scarce – leading many to have to cut to the chase.

“It’s a huge advantage to be super well capitalized at this moment,” said Rubens. “We can continue our aggressive plan while also attracting the best talent.”

Source: Brazil Journal

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