Israeli shared multimodal mobility operator GoTo Global Mobility has acquired German shared electric scooter company emmy. The strategic agreement will help GoTo Global, which provides customers with access to shared cars, vans, mopeds, scooters and bicycles, achieve its goal of expanding to all major European cities by 2025. GoTo Global would not share not the financial terms of the agreement.
The acquisition of emmy, which has a fleet of more than 3,000 shared electric scooters (no scooters) across Berlin, Hamburg and Munich, gives GoTo direct access to the German market. The company’s current footprint includes Spain, Malta and Israel.
“In Germany this is a huge opportunity for us because Emmy is a big company with five years under its belt, but they only have mopeds, and you can’t retain users without building trust in mobility, and that’s what we’re trying to do, ”said Gil Laser, CEO of GoTo Global. “We try to give you with our app the same feeling that you have a solution to move, anytime, anywhere. We can take [emmy’s] user base of over 300,000 people, and using GoTo technology, converts this business from mono-vertical to multimodal, and immediately begins offering cars and other micromobility options, short journeys and long journeys. “
As part of the acquisition, GoTo also takes over the debts from Emmy. In April, shared mobility software company Wunder Mobility launched loan service and announced plans to help Emmy fund 1,500 refurbished Yadea scooters, which will now be GoTo’s responsibility to pay off. Laser said GoTo intends to maintain the relationship with Wunder going forward.
Emmy users won’t immediately notice a difference in branding until next year, when GoTo intends to fully integrate the service under its own brand and connect users to other forms of mobility. Laser said GoTo will bring other forms of mobility, such as cars and e-bikes, to Germany from the first quarter of next year. The company also recently raised rounds totaling $ 22.5 million and is currently raising more to help it expand into Italy, the Netherlands and Portugal next year, according to Laser.
“Our goal is to be the Netflix of mobility,” Laser told TechCrunch. “At the end of the day, users will pay us X dollars and you will get free rides on the vehicle of your choice.”
Up to this point, the company must establish a presence and brand loyalty. Laser says multimodality that includes car rental is the company’s secret sauce for success, as part of a strategy that has led GoTo to be profitable and generate positive cash flow in its most market. mature from Israel. The company hopes the strategy will also translate to more than $ 116 million in annual revenue by the end of 2023.
It’s a balance between the cost of acquiring users and the amount of money you can generate from a user, says Laser. Shared micromobility companies have a low cost of ownership because they just put their assets all over the street, people see them, download the app and then become customers. The problem is that revenue per user (RPU) is generally low, in large part because there is no difference in service between companies, and therefore no loyalty, according to Laser.
Car rental companies have a different problem. They have a higher RPU because you can charge $ 20 to $ 30 per ride, but the marketing costs to acquire a user are really high.
“The way we solve this problem is the philosophy of multimodality,” said Laser. “We are converting the user to use more and more services. Like you come to the supermarket to buy vegetables, but you also end up buying meat and milk. “
The company achieves this in particular through various promotion-type programs. For example, Laser says GoTo charges $ 3 for the first 15 minutes of any trip on any vehicle. If a new user comes to book a scooter ride and adds € 3 to their wallet, they can automatically see € 9 in the wallet which can be used to purchase a car ride. This alerts the user to other use cases and hopefully builds brand loyalty in a cheaper way than spending hundreds of millions of dollars on advertising with Google and Facebook, says Laser.
The result so far has been that 90% of B2C revenue comes from returning users, and 41% of all customers are multimodal users. It could also be in part because GoTo also charges a subscription, which can range from around $ 2 to $ 7, to use its service.
In order to achieve a healthy unity economy, the company also combines ownership and leasing of assets.
“At the end of the day, our product is more efficient,” said Laser. “By not owning the assets, we are taking advantage of the arbitrage of taking a car or a moped and renting it for two years and re-renting it to our users for two minutes, and by doing so, we can save a lot of money. profits. “
GoTo has memoranda of understanding with Renault, Toyota, Nio and Segway. He currently rents his cars and mopeds and owns his own smaller micromobility vehicles, but hopes to lease them in the future as well. However, one of the main issues faced by micromobility operators has been the very rapid depreciation of shared assets, so it’s hard to imagine a scooter maker wanting to own the asset and not earn rental income from it.
One way to make this program work would be to have very high usage rates, which requires different types of demand that peak at different times. In addition to its primary commuter customer base, GoTo actively targets business customers through three different models. The first and second are to get companies to offer benefits to employees in the form of subscriptions or mobility portfolios. The third is for companies to reserve dedicated fleets for their employees, generally between specific working hours such as 8 a.m. to 6 p.m. After 6 p.m., fleets would become available to communities again, Laser said. Business customers currently account for 13% of GoTo’s revenue, but the goal is to increase them to 50% by 2025.
“We are now on track to achieve 100% year-over-year growth in 2021 and we know that GoTo’s multimodal mobility experience means we can get to the heart of the mobility problem. urban, ”said Laser. “Today we assume that we are at least 30 to 36 months ahead of other platforms and offerings in the market.”