Founders of Brazil’s Largest Ride-Hailing App Turn to Scooters
(Bloomberg) -- The scooter craze is coming to Brazil. Yellow Soluções de Mobilidade Ltda., a Brazilian bike- and scooter-sharing startup, raised $63 million as the company aims for expansion throughout Latin America.
The funding round was led by GGV Capital and included investors Monashees, Grishin Robotics and Base10 Partners. Yellow declined to disclose its valuation. The company said it plans to use the funding to expand throughout Brazil and Latin America, with business in Mexico at the top of its to-do list.
Electric scooters have already blanketed the streets of American, European and Chinese cities, delighting some pedestrians and infuriating others. Meanwhile, valuations for scooter companies have soared, notably with California-based Bird Rides Inc. raising money at a $2 billion valuation. As more international players seek global expansion, Yellow is betting that a home-turf advantage will give it an edge in Latin America.
Yellow started a dockless bike-sharing program in Sao Paulo in August, and has plans to deploy at least 20,000 bikes and more than 1,000 scooters in the city by the end of the year. The startup was founded last year by Ariel Lambrecht and Renato Freitas -- creators of the Brazilian ride-hailing company 99, which Didi Chuxing acquired this year -- as well as Eduardo Musa, former chief executive officer of Brazilian bike-maker Caloi.
Yellow currently imports its scooters from China, like most rival companies, but it has plans to build its own scooter factory in the region and is currently scouting locations. It cited the high costs of importing scooters as a factor in its strategy. Yellow won’t be the only company with a custom product, however. Lime uses specially built models, and Uber Technologies Inc.’s Jump Bikes is in the process of designing its own scooter, Bloomberg reported in August.
“I would guess that we are a little bit ahead of Uber in that plan," said Musa, Yellow’s CEO. "We have more factory and industry DNA than Uber."
Musa declined to comment on whether Yellow would sell scooters to other companies, but as competition escalates around mobility companies and business models evolve, he did say, “The future is open for everyone.”
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