London-based Zeelo, a global transit-tech company, has closed a $14 million Series A extension round. The oversubscribed round saw investment from venture capital firms, including FlatzHoffmann, the European growth equity investor, IREON Ventures, the venture capital arm of Motor Oil Hellas, and a prominent Boston-based family office. The round also saw participation from several angel investors. The funding will fuel Zeelo’s expansion into global markets, especially the US, as it fills gaps left by public transport.
CEO and co-founder Sam Ryan joined TFN to share how Zeelo makes a real difference to transport, and to the environment and people’s lives.
Solving the problem of public transport shortage
Ryan started thinking about the problems of transportation when he was a student at Leeds with his co-founder, Barney Williams, and struggling with transportation. “We started a business called JumpIn, which allowed people to book and share taxis,” said Ryan. “We had that idea from taking two separate taxis to meet for a drink!” And that marked the start of the pair’s journey into transportation, he says, “I guess we fell into transportation and kind of fell in love with the problems that we were solving.”
JumpIn was acquired by London private cab company Addison Lee in 2014, and Ryan and Williams spent the new few years working there and learning more about the transportation sector before deciding it was time to start something new. Zeelo came from the realisation that, outside London, transport was very different.
“What we saw was a huge amount of innovation and new startups in what I would describe as like sticky or urban-based transportation problems,” Ryan told us, “but we think there wasn’t enough focus on people outside the world’s largest cities.” A combination of cost, policy, and demographics, have meant that the public transport experience changes dramatically outside cities. “Close to 90% of people in London take public transport, walk, or cycle to work,” Ryan explained. “Outside of London, nearly 80%, sometimes more, drive to work on their own, and that’s even true in Manchester and Birmingham.”
For Ryan, addressing that issue is not just about transport: “we wanted to solve that car dependency problem because we think it’s the root of so many sustainability challenges, but also social challenges, like people’s ability to reach work and education.”
Zeelo’s solution provides customised transportation services for daily commutes to suburban and peri-urban areas that lack sufficient mass transit coverage. Zeelo’s platform offers insights to its clients to plan their headcount, capacity, and punctuality, increasing bus ridership by nearly 50% and enabling an average of 43% in cost savings per year for employee shuttle transportation.
A proven solution to the transport problem
Zeelo’s success has seen them grow rapidly, despite the challenges of Covid. “The pandemic turned into an opportunity for the business,” Ryan explained. Many people still needed to go to work, but with limited or no access to a car, and restrictions on public transport, Zeelo found a new market for their product. “Customers like Tesco and Amazon provided transportation for their employees through our platform, and that accounts for about 60% of our business now.”
Zeelo is now serving three main business segments. “The first is office-based employers, serving corporate head office campuses like Jaguar Land Rover. The second is the market for frontline workers: big warehouse employers like Amazon and UPS, and supermarket chains like Tesco and Co-op. The third segment is large universities and schools.”
This growth and potential have been key to securing investment. FlatzHoffmann partner, Christopher Hoffman, said, “Zeelo is a unique and proven mobility player headquartered in Europe with a strong expansion push to the US. It combines a strong transit-tech platform with a clear sustainability mission. We are convinced of Zeelo’s experienced leadership team and its ability to innovate and execute. They have come very far in building their business, and we look forward to supporting their growth strategy for developed markets.”
Expanding across three continents
Zeelo will be using the funding to continue its rapid growth. Having started in London, they are now opening a second headquarters in Boston to help support their expansion in the US market, with both Ryan and Williams relocating there. “We already had a small team here when we came out of pilot, and started scaling up the business in 2022,” Ryan told us. “And what we saw is a strong product-market fit, and there were strong signals that we should really double down on the investment.” And the move is already paying dividends, says Ryan, “the US already accounts for close to 20% of our overall business, and we expect to grow the US business about four times this year.” They will also be expanding their team, currently 110, spread between London, Boston, South African and Barcelona and comprising 20 nationalities.
The company plans to move to net-zero battery-electric buses by 2030, but are already having a big effect. In 2022, the company contributed to offset over 2,600 tons of CO₂ emissions and created over 26,000 employment opportunities, with 70% of Zeelo riders admitting that they rely on the service to commute to work. And for Ryan, that’s part of Zeelo’s mission. “We think about the impact in two different ways,” says Ryan. “One is the social impact, the number of job opportunities and education opportunities that our platform allows. And second is the reduction in CO₂ emissions by moving people away from cars and into bus transportation.”
