Electric moped startup Revel raises $27.6 million as it eyes new markets
In less than two years, Revel has gone from an idea to a shared electric vehicle startup with more than 1,400 mopeds across Washington, D.C., and Brooklyn and Queens, New York. Now, it’s ready to grow up and beyond these three cities with a fresh injection of $27.6 million in capital raised in a Series A round led by Ibex Investors.
The equity round included newcomer Toyota AI Ventures and further investments from Blue Collective, Launch Capital and Maniv Mobility.
The capital will, as it often does with startups, allow Revel to scale up. CEO and co-founder Frank Reig said this growth will extend to its fleet of scooters within the cities it currently operates as well as expand into new markets. Reig wouldn’t name where the New York-based startup will launch next, although he provided some hints. Large U.S. cities with the right population density and more temperate weather are at the top of the list.
Revel is targeting about 10 cities by mid-2020, Reig added.
How that growth occurs, and who is behind its operations, is what Reig believes differentiates Revel from other shared electric vehicle providers such as scooter startups that have had a record of deploying in cities before getting approval from local authorities.
Many startups in the shared industry, including Revel, talk up their focus on safety and desire to be responsible partners with cities. Revel’s choice of vehicle along with a few other decisions helps it stick to those promises.
“These mopeds are motor vehicles,” Reig noted. “This means there’s no regulatory gray area: you have to have a license plate. To get that license plate you have to register each vehicle with the Department of Motor Vehicles in each state and show third-party auto liability insurance. And then because it’s a motor vehicle, it’s clear that it rides in the street, so we’re completely off sidewalks.”
Revel caps the speed of its mopeds to 30 miles per hour. The company also provides two helmets and single-use liners on every ride and requires users to be licensed drivers aged 21 or older who pass an initial safe driving history check. About one out of every 12 applicants does not make it past this screening, according to Revel.
Any concerns about users bypassing the protective headgear are largely erased because both New York and Washington, D.C. have helmet laws, Reig said.
No gig workers
The company, unlike most on-demand mobility startups, does not have any gig economy workers, either. Revel only has full-time employees, said Reig, adding that it’s a decision he intends to stick with even as his company grows.
“We don’t use gig economy in anything we do and I see a ton of value in that,” Reig said. “We need a well-trained workforce that is really committed and cares about the vehicles, because if not it’s something we’re going to be throwing out every 60 days.”
Revel’s shared mopeds have a three-year asset life, Reig said, based on their in-house estimates. To ensure the mopeds last, which has become a key factor in the unit economics of shared mobility businesses, they remain on the street.
The mopeds are removed by employees for routine maintenance that occurs every four to six months. Otherwise, the mopeds aren’t loaded into vans by gig economy workers who make money by charging them up a common practice with the small stand-up scooters that have inundated cities like San Diego and San Francisco. Instead, employees swap out the batteries on the mopeds, which have a range of about 50 miles.
20 months and 1,400 scooters
The idea for Revel was born out of Reig’s travels to Buenos Aires, Argentina, where he witnessed locals on every form of two-wheeled vehicle.
“A sort of light bulb went off my head, and I asked myself, ‘why is it not a thing in the U.S?,’ ” Reig told TechCrunch in a recent interview. “I came back to New York, started studying the market more and saw all these electric moped operators had been popping up in Europe over the last few years and just realized that if I don’t do it, somebody else will.”
The company started with a small pilot of 68 mopeds in a few neighborhoods within Brooklyn. In May, after a nine-month pilot, Revel pulled the original mopeds it used in its limited pilot and replaced them with 1,000 new models built for two riders and equipped with kickstands for parking. With more mopeds in its fleet, Revel expanded the service to more than 20 neighborhoods in Brooklyn and Queens. In August, Revel launched its service in Washington, D.C., where there are now more than 400 mopeds.
Revel rides cost $1 per person to start, followed by $0.25 per minute to ride and $0.10 per minute while parked. Revel says it will cut the cost by 40% for eligible riders and give them a $25 credit through its Revel Access program. Riders who use public assistance programs like SNAP or live in NYCHA housing are eligible for the program.