Electric cargo bike startup Zoomo has cut its workforce for the second time in six months, making 27 positions redundant, just weeks after the collapse of major customer Milkrun.
“Zoomo has made the difficult decision to reduce its total workforce by 8%. The restructuring will accelerate our path to company-wide profitability in 2024,” the company said in a statement.
“It’s especially impacting the employees in our headquarters as we align central overhead with regional profit.”
The job cuts come after the money-hungry company secured its balance sheet with an undisclosed $24 million raise from existing lenders to hopefully give it enough jobs to become profitable over the next 12 months.
The round was led by Grok Ventures, the family venture capital fund of Atlassian’s Mike Cannon-Brookes, and the federally backed Clean Energy Finance Corporation. The company said the investment “underlines the strength of Zoomo’s underlying business model” in micromobility.
Zoomo previously cut 16% of its workforce, about 65 people, in mid-October last year, with co-founder and CEO Mina Nada saying at the time “we are witnessing an increasingly challenging macroeconomic environment with heightened risks of declining demand and tighter capital”, which meant “an adjustment in our strategy and cost base”.
Fast forward 28 weeks, amid the demise of a slew of food delivery startups, including customers Milkrun, which shut down in early April and Deliveroo pulled out of Australia in November last year, the fleet subscription business has cut its cash burn yet again.
The venture began as Bolt, a side business for Nada, an ex-Deliveroo and Mobike executive, and his former Bain & Co colleague Michael Johnson. They took it full-time in 2019 and changed their name to Zoomo in August 2020.
Zoomo’s e-bikes are aimed at the last mile delivery – the gig economy, workers and companies that deliver food and other products as part of the urban supply chain. Its customer base includes UberEats, Doordash and Domino’s, with operations in 16 cities on three continents, including Brisbane, Sydney and Melbourne, as well as Germany, the UK, France and Spain, Canada and the US.
As of 2020, more than 80% of Zoomo’s revenue has been generated outside Australia, with revenue growing by 112% by 2022.
A spokesperson for Zoomo said the company had positive gross margins and country-level profitability in 2022.
In just over two years, during the pandemic era of cheap and fast-flowing capital, Zoomo raised about $140 million, starting with $16 million in August 2021 and another $16 million in a Series A eight months later. Only six months had passed before Cannon-Brookes and Scott Farquhar of Atlassian backed Zoomo’s $80 million Series B in November 2022 through their family VCs, Grok and Skip Capital.
Just three months passed before investors poured another $28 million into a Series B upgrade.
Zoomo’s capacity table also includes AirTree Ventures, the Clean Energy Finance Corporation (CEFC), Contrarian Ventures, Maniv Mobility, New York VC Collaborative Fund; MUFG Innovation Partners, the VC arm of Mitsubishi UFJ; local mobility solutions company SG Fleet; WIND Ventures, the VC arm of Latin American energy and mobility company COPEC; and Akuna Capital.
Over the past four years, Zoomo has rationalized its fleet and now offers two types of e-bikes for riders, with a range of 60 km and a top speed of 25 km/h, which cost $39 per week to rent.
Companies can choose from an e-bike, two e-mopeds, with a range of 90 km and 160 km, and an e-quad.