Zypp Electric’s annual revenue jumps 459% in FY23 as it gears up for expansion in Bengaluru

Zypp Electric was founded in 2017 as a bicycle rental platform. A year later, it pivoted to an EV-as-a-service model. The startup is now looking beyond Delhi-NCR—its biggest market so far—to Bengaluru for expansion.

Zypp Electric’s annual revenue jumps 459% in FY23 as it gears up for expansion in Bengaluru

Tuesday May 02, 2023,

5 min Read

Electric vehicle (EV) fleet platform Zypp Electric's revenue for FY23 surged by over 5X, reaching a staggering Rs 125 crore, thanks to its partnerships with prominent logistics firms, including Blue Dart, DTDC, and Ecom Express, and delivery giants such as Zomato, Swiggy, and Zepto.

In an exclusive conversation, Akash Gupta, Founder of Zypp, told YourStory that the startup's average gross margin was 35% for FY23.

Its contribution margin—representing the amount earned by subtracting the variable cost from the selling price per unit—had become positive, indicating the company was making a profit on each unit sold or leased.

By March 2024, Gupta anticipates the startup will reach breakeven and become profitable by FY25. This, however, is slightly later than his previous statement to Moneycontrol, where he indicated Zypp would start earning net profit from October 2023 onwards.

He says the business was “already profitable this year in Delhi-NCR, but due to rapid business expansion plans that changed.” Zypp did not disclose the exact profit or loss figures to YourStory and refrained from commenting on its expenses for the year. It is worth noting that historically, Zypp's expenses have outpaced its revenue growth.

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Nonetheless, there has been growth, and the company expects to continue to grow, given the government’s target to electrify 30% of the country’s total fleet by 2030.

Zypp’s biggest competitor is MoEVing, which has raised a total funding of $10 million from JSW Ventures, Strides Pharma Science, LetsVenture, N+1 Capital, and others.

The Gurugram-based startup also competes with Yulu, which provides EV bikes and scooters for personal and commercial use. Recently, Yulu signed a deal to provide up to 35,000 bikes to its delivery partners.

Bengaluru in focus

Founded by Gupta, Tushar Mehta, and Rashi Agarwal, Zypp started in 2017 as a bicycle rental platform. In 2018, it launched its e-scooter rental service, particularly targeting the last mile. Its two-wheeler commercial delivery fleet segment provides an electric two-wheeler and a driver.

Gupta says that while deploying EV two-wheeler fleets was a logical step for the company due to the widespread use of scooters and bikes in India for last-mile delivery, he saw an opportunity to offer additional value by addressing the challenges faced by companies like Swiggy and Zomato with regards to their drivers.

“There’s always a lot of churn in the delivery partner segment… People jump from one company to another very quickly, which sometimes can leave companies understaffed. We realised that providing a delivery executive, along with an e-bike was more valuable for a company like Swiggy than just selling them the bike,” he explains.

Further, Zypp having its own set of drivers enables the company to train them to handle and ride an EV, ultimately enhancing the safety of the rider and the bike.

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At present, Zypp has 12,000 e-bikes in operation—mostly in Delhi-NCR, its biggest market—with plans to significantly expand its presence in Bengaluru before branching out to other cities.

For Bengaluru, the company has earmarked an investment of Rs 100 crore over the next couple of years, of which it has already invested Rs 20 crore to Rs 25 crore.

Gupta says he wants to put 2,000 e-bikes on Bengaluru roads in the next couple of months. The startup has partnered with multiple delivery companies such as Zomato and Swiggy to expand its presence in the city.

Business model

Zypp is essentially a bridge between driver partners and e-scooters and bikes.

It leases out e-bikes from financing companies such as NBFCs and others who want to bet on EVs as an investment and further leases them out to drivers.

The asset-light business model helps Zypp upgrade its fleet regularly and scale rapidly since leasing is cheaper than buying the vehicles, thus making it affordable for its driver partners to rent them out from the company, Gupta explains.

Drivers pay Rs 200 per day as a rental fee to the company, but the financials can be customised as per their needs.

“If a driver wants to drive more days a month, or fewer days a month, we can help figure out a rental model for them,” Gupta says.

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Typically, Zypp Electric drivers earn between Rs 16,000 and Rs 18,000. According to Indeed.com, Swiggy delivery partners in Karnataka earn an average of Rs 26,500 per month, while Zomato drivers earn around Rs 18,740.

The Gurugram-based startup has partnered with Taiwan’s Gogoro Inc to pilot its B2B offering. Zypp also plans to use Gogoro’s swapping network for its energy needs.

Zypp has raised a total of $37.5 million in its funding round from investors, including Gogoro, Wells Fargo, LetsVenture, 9Unicorns, We Founder Circle, and others. It raised $25 million in a Series B round earlier this year from Gogoro.

The startup said it does not have any immediate plans to raise a fresh round since it’s well-capitalised, but it is engaging with multiple investors to calibrate its next round.

(The story was updated to correct Tracxn data on total funding raised by Zypp Electric and MoEVing)

Edited by Suman Singh