GoTo Global Mobility, an Israeli multimodal mobility company, has purchased emmy, a German shared electric scooter company. GoTo Global Mobility, which provides customers with access to electric scooters, bikes, mopeds, and shared cars, will benefit from the strategic acquisition. GoTo Global will not disclose the financial terms of this deal.
GoTo has an easy path to Germany through the acquisition of emmy. The company owns a fleet over 3,000 electric step-through scooters that are shared in Berlin, Hamburg, and Munich. Spain, Malta, and Israel are the current locations of the company.
We see Germany as a huge market because emmy, a company that has been around for five years, is a great company. However, they do not have mopeds. You cannot build user loyalty without creating mobility trust, which is what Gil Laser, CEO at GoTo Global, stated. Our app gives you the feeling that you can move anywhere, anytime. We can take [emmys] users of over 300,000 and, using GoTo technology transform this company into a multimodal. Then, we will immediately offer cars and other micromobility options to them, as well as long and short trips.
GoTo will also take on the emmys debts as part of the acquisition. Wunder Mobility, a shared mobility software company, launched a lending program in April. It announced that it would help emmy finance 1,500 retrofitted Yadea scooters. GoTo will be responsible for paying back the loan. Laser stated that GoTo plans to keep the relationship with Wunder going forward.
Emmy users will not notice any difference in branding until next years, when GoTo plans to fully integrate GoTo's service and connect users with other forms of mobility. Laser stated that GoTo will be bringing other forms of mobility to Germany, such as cars and ebikes, in Q1 next year. Laser reports that the company has raised $22.5 million in rounds and is actively seeking additional funding to expand its reach into Portugal, Italy, and the Netherlands over the next year.
Laser stated that our goal is to become the Netflix of mobility. End users will pay us X dollars, and you'll get free rides in any vehicle you choose.
The company must establish brand loyalty and presence before it can reach this point. Laser claims that multimodality, which includes car rental, is the secret to success. This strategy has allowed GoTo to become profitable in Israel's most mature market. The company expects that the strategy will result in an increase of $116 million annually by 2023.
Laser says that it is a balance act between user acquisition costs and the amount of money you can make from each user. Because they simply put their assets on the streets, customers see them and download the app, shared micromobility companies can have a low acquisition cost. Laser says that because there is no differentiation in service between companies and no loyalty, the problem is that revenue per user (RPU), is often low.
This is a problem for car rental companies. Car rental companies have a higher RPU, as you can charge $20-30 per ride, but marketing costs are very high to get a customer.
Laser said that the multimodality philosophy is how we can solve this problem. We make it easier for the user to access more services. You might go to the supermarket to purchase vegetables, but you end up buying meat or milk.
The company achieves this by offering a variety promotion-type schemes. Laser states that GoTo charges 3 per 15 minutes for any ride on any vehicle. A new user might book a ride on a scooter, add 3 to their wallet and they may see 9 that can be used to purchase a car. Laser says this alerts users to other uses and creates brand loyalty that is cheaper than spending hundreds or millions of dollars advertising on Facebook and Google.
So far, 90% of B2C revenue has come from returning users and 41% are multimodal customers. GoTo charges a membership fee to access its service, which can cost anywhere from $2 to $7.
The company also blends leasing and owning assets to ensure healthy unit economics.
Laser said that the product was more efficient in the end. We don't own the assets so we have the option of arbitrage. For example, you can rent a moped or car for two years, then rent it back to your users for two minutes. This way we can make a lot of money.
GoTo has MOUs with Renault and Toyota, Nio, Segway, and Nio. GoTo currently leases cars and mopeds, and also owns smaller micromobility vehicles. However, it hopes to lease these in the future. One of the biggest problems for micromobility operators has been how quickly shared assets depreciate. It is hard to imagine a scooter manufacturer wanting the asset to generate rental income.
To make this scheme work, you need to have high utilization rates. This requires different types and hours of peak demand. GoTo has three models for targeting business customers, apart from its commuter base. First and second, companies can offer benefits to employees in the form subscriptions or mobility wallets. Third, companies can reserve fleets exclusively for employees between certain hours of work like 8am-6pm. Laser says that the fleets will be available again for community use after 6pm. GoTos currently has 13% revenue from business customers, but it is aiming to increase that to 50% by 2025.
Laser stated that we are currently on track to record 100% year-on-year growth in 2021. We also know that GoTos multimodal mobility experience allows us to directly address the urban mobility problem. We believe that we are at least 30-36months ahead of all other platforms and offerings on the market.
