India’s Yulu raises $93M as quick-commerce boom fuels e-bike demand

India's quick-commerce sector has seen electric mobility startup Yulu secure $93 million in fresh funding as demand for e-bikes surges. Based in Bengaluru, the company offers electric two-wheelers on a weekly subscription basis, enabling delivery drivers to lease vehicles without purchasing them outright. With approximately 50,000 electric bikes in its fleet, Yulu processes around 1.6 million miles of deliveries weekly and powers over 750,000 daily deliveries.

The newly raised capital will expand the fleet to 200,000 bikes within two years and introduce faster electric two-wheelers for various logistics purposes. The Series C funding round included $63 million in equity led by GEF Capital Partners and $30 million in debt financing. Co-founder and CEO Amit Gupta stated that $5.5 million of the equity portion was used to repurchase shares from seed investors nearing the end of their investment horizon.

The valuation of Yulu post-money was estimated at $170 million, though Gupta declined to comment on the valuation figure. Existing investors Bajaj Auto and Magna International did not participate in the round after waiving their right to purchase shares. Yulu anticipates this to be its final equity fundraising before a potential public listing, with future fleet growth primarily funded through debt and lease financing.

The startup aims to become profitable before interest and taxes next year, following a positive EBITDA in the previous financial year, with revenue growing seven-fold between fiscal 2023 and 2026. Founded as a bike-sharing service for urban commuters in 2017, Yulu gained significant traction during the COVID-19 pandemic due to increased demand for food and grocery deliveries.

Currently, 95% of its revenue comes from renting electric bikes to gig workers on weekly subscriptions, with the remainder generated by its station-based rental service in Bengaluru. The company has shifted away from selling bikes directly to consumers. The upcoming Yulu Express, a higher-speed electric scooter, is designed for long-haul e-commerce deliveries, bike taxis, and express parcel services, accounting for about a third of the projected 200,000-vehicle fleet.

About 500 of these high-speed bikes are already operational in Bengaluru and are being tested in three additional cities. Yulu currently operates in 12 Indian cities, with plans to expand to around 20 cities within the next year, targeting Chennai and Pune as key markets. The startup partners with major quick-commerce, food-delivery, and e-commerce platforms like Amazon and Walmart-owned Flipkart, acting as the "AWS of mobility" by providing the infrastructure for delivery workers to operate without taking a cut from these platforms.