The electric bike start-up Zoomo, which previously supplied the now-collapsed rapid grocery delivery platform Milkrun, has recently announced its second round of lay-offs, after reducing its global workforce by 16% six months ago. The company has confirmed that it has cut 27 jobs in the latest round of redundancies. In an official statement, the company stated that “Zoomo has made the difficult decision to reduce its overall head count by 8 per cent. The restructure will accelerate our path to company-wide profitability in 2024. It primarily affects employees in our corporate head office, as we bring central overheads in line with regional profit.”
Zoomo is known for providing electric scooters and e-bikes to the grocery and delivery sector and has established a strong customer base that includes well-known names such as UberEats, Domino’s, and DHL. The company was founded in 2017 by former Deliveroo executives Mina Nada and Michael Johnson. They initially set the company up as a provider of electric bikes for last-mile delivery businesses. Since then, the company has expanded its operations and now operates in about 16 cities across Australia, North America, and Europe.
Unlike traditional bike retailers, Zoomo markets itself as a subscription service for companies or delivery riders that would also maintain fleets of e-bikes. However, the company is now facing stiff competition from cheaper e-bikes that are directly imported from manufacturers in Asia and are popular among cost-conscious gig economy workers.
The collapse of Milkrun and other similar companies has signaled trouble for start-ups that depend on regular injections of investment to sustain their losses. Such investments were possible when interest rates were near zero, but now start-ups are facing a downturn in the industry, which has forced many to cut staff across multiple redundancy rounds. This has prompted some executives to acknowledge that previous cost savings were not enough.
Zoomo has raised a total of $US116 million (A$174.8 million) in funding, which includes $US15.9 million ($24 million) from existing investors in a recent raising led by Atlassian co-founder Mike Cannon Brookes’ Grok Ventures and Clean Energy Finance Corporation (CEFC). The fresh funds will go towards “continued investments in core technologies while charting our path to profitability,” the company said. Despite the challenging circumstances, the company remains optimistic about its future prospects, stating that “the capital injection in the current venture capital environment underscores the strength of Zoomo’s underlying business model and our differentiated customer proposition. Zoomo has an exciting opportunity to capture the massive market potential of micromobility.”
Zoomo’s investors include Skip Capital, founded by Kim Jackson and husband Scott Farquhar, and Airtree Ventures, which also invested in Milkrun. It provided bikes to a cohort of now-collapsed instant delivery grocery companies, including Milkrun, Voly, and Send. However, despite the company’s recent troubles, it remains committed to its goal of capturing the vast potential of micromobility.