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US-based Whizz revs up growth with $12M funding round led by LETA Capital

Image credit: Whizz

Whizz, a leading e-bike subscription service for last-mile delivery drivers, has secured $12 million in a Series A funding round. This investment, led by LETA Capital with participation from Flashpoint, brings Whizz’s total funding to $20 million and fuels the company’s ambitious US expansion plans.

Just a couple of days ago, we also reported about Swiss startup Neural Concept that raised $27M to transform EV design with AI. It’s a good read.

Mike Peregudov, Co-founder and CEO of Whizz, emphasises the company’s strategic edge saying, “Whizz has established itself as a leader by building the safest and most reliable delivery e-bike in the market. We’ve also developed robust software that allows for exponential growth without compromising efficiency. The market is maturing, with stricter regulations posing a challenge for new entrants, but favourable news for established players like Whizz. We’re determined to become the number one e-bike rental service in the US.”

How will the funds be used

The funding surge comes on the back of Whizz’s impressive growth trajectory. The company boasts a 3.5x year-over-year growth rate and boasts annual recurring revenue (ARR) exceeding $8 million. Whizz aims to utilise these fresh funds to address critical issues in the delivery industry, including worker safety and the environmental impact of gas-powered vehicles.

Many last-mile delivery drivers, particularly immigrants, face challenges in accessing affordable and safe electric transportation due to a lack of credit history. Here, Whizz steps in by providing a subscription model, removing the upfront investment barrier. Moreover, the company prioritises safety by offering e-bikes that comply with increasingly stringent regulations. In New York City, Whizz’s key market, the company highlights a concerning rise in battery-related fires involving non-compliant e-bikes. Whizz’s compliant vehicles significantly lower this risk, contributing to a safer work environment for drivers and the general public.

Strategic partnerships and market expansion

This focus on safety has resonated with major delivery platforms. Whizz has secured partnerships with DoorDash and Grubhub, giants representing a combined 75% market share in the US food delivery market. These partnerships position Whizz as a preferred e-bike provider, enabling them to offer delivery workers increased earning potential.

Denis Mosolov, Managing Partner of Flashpoint Growth Debt, believes in Whizz’s scalability and positive impact: “Whizz offers an affordable, safe, and sustainable solution for delivery workers. We’re excited to support Whizz in this round and witness their continued success.”

Similarly, Sergey Toporov, Partner at LETA Capital, highlights Whizz’s strong fundamentals that resonate with their investment philosophy: “The hype around micro mobility has subsided, but Whizz stands out as a company with tangible business value. Their efficient management and impressive scaling potential convinced us of Whizz’s promise.”

Looking ahead, Whizz plans to leverage a combination of equity and debt funding to accelerate its growth. The company intends to expand its current fleet of 2,500 e-bikes, known for their long battery life, GPS tracking, and anti-theft features, to a staggering 200,000 vehicles by 2030. Furthermore, Whizz will introduce all-new electric mopeds to cater to diverse needs, while geographically expanding beyond their initial presence in New York and New Jersey.

This growth trajectory is driven by a core mission: empowering immigrant workers. The Whizz co-founding team, comprising Mike Peregudov, Alex Mironov, Ksenia Proka, and Artem Serbovka, are all immigrants who understand the challenges faced by newcomers. Their vision is to provide affordable and safe transportation options, enabling delivery drivers, particularly immigrants, to improve their livelihoods.

What we think about the startup

Whizz’s recent funding round signifies investor confidence in the company’s ability to address critical issues in the last-mile delivery sector. Their focus on safety, sustainability, and partnerships positions them for success. As Whizz expands its footprint and fleet, it will be interesting to observe how they impact the working conditions and earnings potential of delivery drivers across the US.

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