Brazilian motorcycle rental startup Mottu raises $40 million to help more Latin Americans become couriers – gotechbusiness.com

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mottua Sao Paulo-start up motorbike rental, has raised $30 million in equity in a Series B financing round.

The company that aims to provide independent couriers with a way to work for logistics and food delivery apps, and has also secured $10 million in debt financing. Most, if not all, employees have little to no or poor credit, so buying a motorcycle is simply not an option.

Mottu started operations in early 2020 with a fleet of 200 motorcycles in its home city of São Paulo. By the end of the year it was up to 1,000 motorcycles and $2 million in annual recurring revenue (ARR). Today, the startup operates in eight Brazilian cities and Mexico City with a fleet of 10,000 motorcycles. It grew its ARR 5x in 2021, meaning it reached $10 million in ARR by the end of last year, according to CEO and founder Rubens Zanelatto.

Verde Asset, one of Brazil’s largest asset managers, provided the debt portion of the company’s latest financing. That capital, Zanelatto said:Mottu’s plan is to quadruple its fleet by the end of the year and have 50,000 motorcycles by 2023.

Over time, Mottu has further developed its model, doing much more than just renting motorcycles. It too offers credit, insurance, maintenance and 24-hour support for its tenants. And for those who want to become a courier, Mottu also offers a driving school.

The latest increase follows a $20 million Series A financing in early 2021, which Zanelatto said would enable the company to significantly expand its fleet, expand geographically and build its own delivery offering — covering more than 1,000 retailers use. Motto plans to use part of its new capital to hire more than 50 senior engineers as well as a chief technology officer (CTO), adding to its current workforce of 400.

Notably, Base Partners and Crankstart – a San Francisco-based family foundation founded by Harriet Heyman and Sequoia Capital partner Michael Moritz — co-led equity financing of the company. Tiger Global Management competed in both the Series A and Series B rounds of Mottu.

For the unfamiliar, Moritz supported people like Google, LinkedIn, PayPal, Yahoo, Stripe, Klarna and Getir. Crankstart was founded to “address social problems and their root causes.”

Indeed, Mottu’s model aims to solve a number of social problems in Latin America: unemployment and crime.

“Our customers are unemployed people with very bad credit scores,” Zanelatto told gotechbusiness.com. “Those people can’t go to a dealership and buy or lease a motorcycle to work as a courier. And we solve all bottlenecks that couriers have during their work trajectory. We try to make our courier business model a logical decision.”

Mottu’s customers pay the startup a weekly rental fee of about $150 per month, prompting the startup to describe its offering as a “Hardware-as-a-service”. His clients, Zanelatto said, earn more than minimum wage on average — that’s $300 a month in Brazil.

Brazil has also seen a spike in the number of reported robberies carried out by fake couriers. Mottu’s branded and tracked engines “represent an extra layer of safety for everyone,” Zanelatto said.

What about the risk of renting to people with a low credit score? Incredibly, the company has zero defaults so far.

“If they don’t pay us, we’ll block the bike,” Zanelatto told gotechbusiness.com. “Because they need the bike to keep making money, they want to pay us.”

Base partner Fernando Spnola told gotechbusiness.com via email that he considers Zanelatto a “thrifty and down-to-earth founder who could dream big while keeping his feet firmly on the ground and his eyes set on creating a capital-efficient company. †

“Rubens has taken a new approach to the last-mile problem and created a solution focused on supplies,” he added. “By putting the carrier at the center, Mottu is not only doing them good, but also building a robust business and technology platform to advance online commerce and logistics in Brazil.”

He also believes that “drastic changes are underway in the way traders streamline their online trading in the post-pandemic economy.” As such, Spnola believes that Mottu is uniquely positioned “to lead the way as a central part of the Internet economy in LatAm.”

“Many SaaS solutions are created in LatAm to help the small and medium-sized merchant operate online, the truth is that there is no viable online trading without reliable logistics, which is the hardest part of the equation,” he added.

Mottu isn’t the only venture-backed Brazilian startup with a mission to help people find jobs through a rental model. São Paulo-based Kovi operates its “all-inclusive” car subscription model under the assumption that more people in Latin America would work for taxi companies if they could afford to drive the necessary vehicle. That startup raised $104 million in a Series B funding round last August.

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