Yulu Claims Revenue Up 3X From Pre-Covid Levels, $6 Mn ARR As Delivery Biz Grows

Earlier this week, shared electric mobility and Battery-as-a-Service (BaaS) startup Yulu announced raising a funding of $82 Mn (INR 653 Cr) from Magna International in its Series B round.

The fundraise came over a year after the startup raised its Series A round in June 2021.

Cofounded by Amit Gupta, RK Misra, Naveen Dachuri and Hemant Gupta in 2017, Yulu offers mobility solutions using electric-two wheelers. Its solutions are currently available in Bengaluru, Delhi-NCR, and Mumbai. 

Yulu is quite well-known for its small, blue-coloured signature bikes known as Miracle among people living in some of the prominent localities in these cities. Besides, it also operates battery swapping stations in these cities.

The onset of Covid-19 pandemic in 2020 hit Yulu’s business, which was largely dependent on people commuting to office, with its revenue going down to almost zero. However, the business recovered within three months with strategic changes. The startup has increased its revenue 3X from per-pandemic, has an ARR of $6 Mn, and 10,000 ebikes operational on the road.

Speaking to Inc42 post the fundraise announcement, Yulu CEO and cofounder Amit Gupta shared the startup’s growth plans, the status of its past collaborations, his thoughts on the current electric vehicle (EV) landscape in India, among others.

Here are the edited excerpts from the interview:

Inc42: Could you elaborate a little about Yulu’s growth plans and how you are planning to use the fresh funds?

Amit Gupta: If you look at our growth story from here, I would talk about three different pillars to it — product, market expansion, and increase in the volume of vehicles. 

Talking about the first pillar and how we are looking at a product as a whole, I would like to first say that when we started this journey, we were laser-focused on the office commute. But then the Covid-19 pandemic hit us and we saw people starting to work from home. At that time, we had bikes, but no users. 

But there was a section of the society who needed to earn some kind of livelihood. So, we thought of creating some infrastructure for the gig workers to become delivery partners. And that’s where our mission, which was originally to reduce traffic and air pollution, also got expanded to livelihood creation.

The thing that we noticed is that this sector was very strategic to Yulu and not just a tactical step that we took using Covid. So, eventually, we took the decision of getting deeper into this segment, and as a matter of that strategy, almost 60% of our revenue today comes from the usage of bikes for last-mile delivery. 

But now we realise that there is also a need to create a better product for the delivery executives because the current product is not created for their purpose and it’s actually not a good use. So, we are launching our second-generation vehicles. Now, we have Yulu Dex, which is a product created for the last-mile delivery of goods, and this will be used by the gig workers. 

Besides, there is also a better-updated version of Yulu Miracle, which is for last-mile commutes for people like you and me. 

Now, coming to geographical footprint increment, we have been in Bengaluru, Delhi and Mumbai with 10,000 bikes. Out of that, 7,500 are based in Bengaluru and the remaining are based in Delhi and Mumbai. In Bengaluru, we are currently catering to almost 35% to 40% of addressable geographical areas.

So, we still have two-third of Bengaluru where we have to launch our service. Post that, Delhi has a very small footprint once again, same as Mumbai. So, we have a humongous opportunity to scale in these three cities by going deeper and denser. We believe that we can deploy 200K vehicles in these three cities very easily.

Having said that, we are also looking at adding some more cities to our service. So, along with these three cities, we are looking at adding three to four more cities, which should ideally be large in terms of population, have a metro, and ecommerce delivery use case. 

We are looking at our first major milestone by deploying 100K vehicles in these certain cities, which we will be able to achieve with this funding round.

If I look at the overall demand pool that we are able to touch and feel, we believe over the next three to four years Yulu should be having more than a million vehicles in the top 20-25 cities in India.

Inc42: Can you elaborate a little about the vehicle upgrade you mentioned?

Amit Gupta: When we created the first version of Miracle, we actually saw several areas of development. We think that the shock absorber of that vehicle is not the best, there’s no backlight, for example. So, when the delivery guys are using these products, there’s no back support and no space for them to carry the bags. 

In the new version, the shock absorbers are of very high quality, the ergonomics is very good, and the lights are brighter in the front. There is a rear light and a rear carrier. And we have been able to solve multiple issues which were part of the first generation.

And then a far more mature product is expected to get launched later this year by Bajaj. So, Bajaj is building our third-generation Miracle and Dex products, which is kind of extremely game-changing stuff.

Inc42: So, how has the collaboration exactly been with Bajaj so far?

Amit Gupta: In the second generation product, their R&D team was involved from day one but they did not design it from scratch. In its case, we took something existing and did incremental improvements. 

But the third generation product, which Bajaj is building, and we will be able to talk more about it sometime in December, is indeed a game changer for us, for the industry rather.

Inc42: You just mentioned about the Covid hit. How did Yulu regain its growth? What has the growth been like?

Amit Gupta: Before the pandemic, our entire usage was centred around white-collar employees using it for the commute. When COVID hit and everything was shut down, we almost got to zero revenue. But then we got a V-shaped recovery just after two months once the people were allowed to go out.

While people like you and I were privileged to be working from home, there was a far larger section of society who had to go out and they had no bus or train. So, Yulu was the only vehicle, which was allowed by the administration to move around because it has no co-passenger. So, it was the safest product with respect to the Covid environment. And that’s why our number recovered almost 200% in three months. 

While our asset count has not changed dramatically and we have 10,000 vehicles, what started to change for us is the mix of revenue. Just for reference, we make INR 200 per bike per day when it’s being used by the delivery executives.

When it is being used by the normal daily commuters, we make around INR 150-INR 170, depending on the city. So, if I have 100 units of bikes and more bikes are being used for delivery purposes, then I will make more revenue. 

So statistically, the concentration of revenue coming from gig workers has been increasing, and hence, our daily revenue and monthly revenue kept increasing with the same amount of assets.

Without changing the count of the vehicle, we basically have been able to grow our revenue from pre-Covid to right now by almost 3X on the back of the better utilisation rate, more usage of the bikes, and even the mix of customer types.

Right now, we are seeing about $6 Mn ARR.

Inc42: What are your plans for expanding Yulu’s swapping infrastructure network?

Amit Gupta: When we started this business, there were no electric scooters. So, along with innovating on the form factor for the scooter, we also had to figure out the suitable battery for our business, how to swap it, and others. 

Then in the last financial budget, there was an announcement that the government wants to promote battery swapping. So, we thought that maybe this is a great opportunity for Yulu to open up our infrastructure for other vehicles also. We have now created a separate entity with Yulu Energy patent, where we are looking to cater to other vehicles, other customer segments using Yulu’s existing swapping infrastructure.

Inc42: How would you solve the interoperability issue in that case?

Amit Gupta: From a policy standpoint, the Government of India and Niti Aayog have been putting it together. We believe that if you force interoperability too early in a strict manner, then it will kill innovation. So, the government is saying that let the ecosystem figure things out. 

Hence, we at Yulu are opening up our battery specification, which is kind of an open source, and then we are saying that if you want to adopt it, please go ahead. If you adopt this battery specification, you’re also welcome to use our network. 

So, what will happen around interoperability is there will be two or three charging standards where people will be converging. And then everyone will centre their vehicles around that, quite similar to what happened in the case of mobile phones connectors and chargers.

Inc42: So, who would be these players that can use your battery swapping infrastructure?

Amit Gupta: The battery pack that we use is 1 kWh. We have a system in place where you can use two battery packs for a high-speed application. But can an erickshaw use it? The short answer is no.

Right now, our use case and our focus is around two-wheelers. Now that this new entity exists, it may take its decision to also come up with a bigger battery, which is not used by the Yulu fleet but could be created for the use case of a sub-customer segment.

Inc42: In 2019 you announced a collaboration with Uber. Where does that partnership stand?

Amit Gupta: I will tell you the good news and the bad news. The good news is we actually literally got execution ready after doing the pilot and almost six months of networking together. Then Covid hit us and we had to pause the implementation of that integration.

Now, with things coming to normal, and more people going on the road, we will see if it makes sense for us to renew or reinitiate the conversation. We are good friends and in touch but we took a joint call of not investing engineering resources when we knew that the whole people mobility part is a little bit shaky.

Also, the good news is Uber has its own platform ready because it has onboarded other partners in global markets. So it’s not like they have to start with some fresh development work. From Yulu’s perspective also, as a precursor to this whole partnership, we also made some fundamental platform-level changes for us to put Yulu’s service in someone else’s app. So from our perspective, if we have to do this, it won’t take much time.

Inc42: What is your perspective on the current EV ecosystem in India particularly with several fire incidents reported in electric two-wheelers and multiple policy changes?

Amit Gupta: Any new product or any new category will take some time to mature. Yes, there have been some mishaps and I am actually not surprised because we probably didn’t understand as a startup ecosystem that these vehicles are not software. When there’s a bug in the software, people don’t die. But hardware is not, unfortunately, like that, which means that you will need far higher quality checks and a very low tolerance for any mistake with respect to safety. 

There’s a very interesting saying that they break things and they move fast. Unfortunately, with hardware, you don’t have an option to break things. I am glad that the Government of India took immediate note and the way they took strict action. I know personally that the ministry called all the founders. 

The number of incidents is not much, honestly speaking. But you don’t want to be in that situation as a consumer. 

Overall, I am personally very excited about the segment because EVs are not just better from an environmental perspective but also in terms of customer experience.

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