Wunder Mobility built its business selling software to shared scooter, e-bike and even short-term car rental startups. Now, it’s banking on a new — and once secret — lending division to bring in more revenue that’ll giving micromobility operators another option to access capital without having pitch venture capitalists and other investors.
The company announced the official launch of Wunder Capital, a subsidiary that provides micromobility operators with fleet financing solutions. Wunder Capital, which has been operating in stealth mode for two years, has already provided financing to more than 25 businesses, according to the company.
As shared micromobility becomes the norm, the industry has the chance to scale dramatically, Gunnar Froh, Wunder Mobility’s founder and CEO, said in a recent interview. He believes traditional VC-backed funding rounds are too slow to keep up with the level of growth required to keep up with increasing demand.
“Now you can now basically launch in a few weeks on our software platform and also get vehicles through us that are optimized for the sharing case, and then pay for them entirely through revenue share,” Froh told TechCrunch.
Wunder Capital aims to become a one-stop-shop for shared operators looking for operational software, high-quality vehicles and the money to purchase them. Froh estimates that such a package deal would cost an operator about 40% of monthly revenue.
The founder originally saw the potential to diversify Wunder’s portfolio when he noticed how much influence his sales team had on operators’ vehicle purchasing decisions. After his team would set up new operators with an app and software, operators would inevitably ask for vehicle manufacturer recommendations.
Wunder Mobility said Tuesday it is also partnering with Yadea, a dominant manufacturer of light-duty electric vehicles in China, to co-develop an e-moped that’s been refitted for shared use. The company also intends to co-develop and finance e-bikes and kick scooters this year, but did not specify which manufacturers it would work with.
“We put reseller agreements in place, so we would always recommend this Yadea moped and then get a margin on it,” said Froh. “Then we’d talk to Yadea and give them modifications to make the mopeds sharing ready, and then we’d have an opportunity to talk to the operators about how they’re going to finance this purchase, what limitations are you facing, and so on.”
Wunder Capital most recently added German electric moped sharing company emmy as a financing customer. Wunder Capital will finance 1,500 refitted Yadea G5L e-mopeds for emmy’s locations in Munich, Hamburg and Berlin. In contrast to Yadea’s consumer models, these mopeds will have a sturdier base, more intuitive controls, doubled range and improved battery management systems.
“Some companies go through venture capital, but it’s very costly in terms of return expectations and the control they want to have, and it’s holding people back from expanding their fleets,” Froh said. “We refinance through banks that would not usually look at a single operator and feel comfortable about the resale of these vehicles. We combine several operators into one portfolio and then we have access to a liquid secondary market.”
In order to ascertain risk and inform loan decisions, Wunder Capital uses APIs to collect anonymized trip data from operators that compares operational efficiency between companies. This data collection also allows the division to flag if an operator isn’t doing well and is at risk of coming up short on payments, in which case Wunder Capital can proactively reach out about restructuring loans.
“If a default happens, we can take vehicles from one operator and send them to another one somewhere else in the world,” said Froh. “So with this model, we can refinance relatively cheaply.”
The best venture capitalists take moonshot risks based on due diligence, support portfolio companies through ups and downs and find focus through noise.
When you look at the job description of the best founder, you’ll find nearly the exact same list of characteristics (except, of course, instead of a portfolio, the founder is supporting a team of employees). The shared ethos is almost uncanny — and includes a slew of strategic synergies both sides of the table can exploit.
That’s why we’re excited to announce that Lisa Wu, a partner at Norwest, is joining us at TechCrunch Early Stage in July to talk tactics, and how founders can think like a VC in all facets of their business.
Wu focuses on seed to late-stage companies with a specific interest in consumer internet, digital commerce and next-generation marketplaces. Her portfolio includes Calm, Ritual, Plaid and the recently public Opendoor.
With the inside scoop on these iconic companies, Wu will use her experience to illustrate how the best founders can leverage the language of venture capital in the pitch and beyond. The goal is to give the audience a list of actionable insights to implement immediately — and lean heavily on anecdotes found in Wu’s impressive work in the industry.
Tickets for TC Early Stage: Marketing & Fundraising are available at the early-bird rate, which gives you an instant $100 savings if you book before next week!
Elon Musk famously said any company relying on lidar is “doomed.” Tesla instead believes automated driving functions are built on visual recognition and is even working to remove the radar. China’s Xpeng begs to differ.
Founded in 2014, Xpeng is one of China’s most celebrated electric vehicle startups and went public when it was just six years old. Like Tesla, Xpeng sees automation as an integral part of its strategy; unlike the American giant, Xpeng uses a combination of radar, cameras, high-precision maps powered by Alibaba, localization systems developed in-house, and most recently, lidar to detect and predict road conditions.
“Lidar will provide the 3D drivable space and precise depth estimation to small moving obstacles even like kids and pets, and obviously, other pedestrians and the motorbikes which are a nightmare for anybody who’s working on driving,” Xinzhou Wu, who oversees Xpeng’s autonomous driving R&D center, said in an interview with TechCrunch.
“On top of that, we have the usual radar which gives you location and speed. Then you have the camera which has very rich, basic semantic information.”
Xpeng is adding lidar to its mass-produced EV model P5, which will begin delivering in the second half of this year. The car, a family sedan, will later be able to drive from point A to B based on a navigation route set by the driver on highways and certain urban roads in China that are covered by Alibaba’s maps. An older model without lidar already enables assisted driving on highways.
The system, called Navigation Guided Pilot, is benchmarked against Tesla’s Navigate On Autopilot, said Wu. It can, for example, automatically change lanes, enter or exit ramps, overtake other vehicles, and maneuver another car’s sudden cut-in, a common sight in China’s complex road conditions.
“The city is super hard compared to the highway but with lidar and precise perception capability, we will have essentially three layers of redundancy for sensing,” said Wu.
By definition, NGP is an advanced driver-assistance system (ADAS) as drivers still need to keep their hands on the wheel and take control at any time (Chinese laws don’t allow drivers to be hands-off on the road). The carmaker’s ambition is to remove the driver, that is, reach Level 4 autonomy two to four years from now, but real-life implementation will hinge on regulations, said Wu.
“But I’m not worried about that too much. I understand the Chinese government is actually the most flexible in terms of technology regulation.”
Musk’s disdain for lidar stems from the high costs of the remote sensing method that uses lasers. In the early days, a lidar unit spinning on top of a robotaxi could cost as much as $100,000, said Wu.
“Right now, [the cost] is at least two orders low,” said Wu. After 13 years with Qualcomm in the U.S., Wu joined Xpeng in late 2018 to work on automating the company’s electric cars. He currently leads a core autonomous driving R&D team of 500 staff and said the force will double in headcount by the end of this year.
“Our next vehicle is targeting the economy class. I would say it’s mid-range in terms of price,” he said, referring to the firm’s new lidar-powered sedan.
The lidar sensors powering Xpeng come from Livox, a firm touting more affordable lidar and an affiliate of DJI, the Shenzhen-based drone giant. Xpeng’s headquarters is in the adjacent city of Guangzhou about 1.5 hours’ drive away.
Xpeng isn’t the only one embracing lidar. Nio, a Chinese rival to Xpeng targeting a more premium market, unveiled a lidar-powered car in January but the model won’t start production until 2022. Arcfox, a new EV brand of Chinese state-owned carmaker BAIC, recently said it would be launching an electric car equipped with Huawei’s lidar.
Musk recently hinted that Tesla may remove radar from production outright as it inches closer to pure vision based on camera and machine learning. The billionaire founder isn’t particularly a fan of Xpeng, which he alleged owned a copy of Tesla’s old source code.
In 2019, Tesla filed a lawsuit against Cao Guangzhi alleging that the former Tesla engineer stole trade secrets and brought them to Xpeng. XPeng has repeatedly denied any wrongdoing. Cao no longer works at Xpeng.
While Livox claims to be an independent entity “incubated” by DJI, a source told TechCrunch previously that it is just a “team within DJI” positioned as a separate company. The intention to distance from DJI comes as no one’s surprise as the drone maker is on the U.S. government’s Entity List, which has cut key suppliers off from a multitude of Chinese tech firms including Huawei.
Other critical parts that Xpeng uses include NVIDIA’s Xavier system-on-the-chip computing platform and Bosch’s iBooster brake system. Globally, the ongoing semiconductor shortage is pushing auto executives to ponder over future scenarios where self-driving cars become even more dependent on chips.
Xpeng is well aware of supply chain risks. “Basically, safety is very important,” said Wu. “It’s more than the tension between countries around the world right now. Covid-19 is also creating a lot of issues for some of the suppliers, so having redundancy in the suppliers is some strategy we are looking very closely at.”
Xpeng could have easily tapped the flurry of autonomous driving solution providers in China, including Pony.ai and WeRide in its backyard Guangzhou. Instead, Xpeng becomes their competitor, working on automation in-house and pledges to outrival the artificial intelligence startups.
“The availability of massive computing for cars at affordable costs and the fast dropping price of lidar is making the two camps really the same,” Wu said of the dynamics between EV makers and robotaxi startups.
“[The robotaxi companies] have to work very hard to find a path to a mass-production vehicle. If they don’t do that, two years from now, they will find the technology is already available in mass production and their value become will become much less than today’s,” he added.
“We know how to mass-produce a technology up to the safety requirement and the quarantine required of the auto industry. This is a super high bar for anybody wanting to survive.”
Xpeng has no plans of going visual-only. Options of automotive technologies like lidar are becoming cheaper and more abundant, so “why do we have to bind our hands right now and say camera only?” Wu asked.
“We have a lot of respect for Elon and his company. We wish them all the best. But we will, as Xiaopeng [founder of Xpeng] said in one of his famous speeches, compete in China and hopefully in the rest of the world as well with different technologies.”
5G, coupled with cloud computing and cabin intelligence, will accelerate Xpeng’s path to achieve full automation, though Wu couldn’t share much detail on how 5G is used. When unmanned driving is viable, Xpeng will explore “a lot of exciting features” that go into a car when the driver’s hands are freed. Xpeng’s electric SUV is already available in Norway, and the company is looking to further expand globally.
Sarah Kunst, founding partner at Cleo Capital, has worn many hats. She’s been an entrepreneur, served on plenty of boards, is a contributing author at Marie Clare, has been a senior advisor to Bumble and worked as a consultant in marketing, business development and more.
And with all that experience, she knows all too well that the process of fundraising starts well before your first pitch meeting. That’s why we’re so excited to have Kunst join us at Early Stage in July to discuss how to get ready to fundraise.
This isn’t the first time Kunst has discussed the topic with us. On a recent episode of Extra Crunch Live, Kunst and one of her portfolio company founders Julia Collins described how to conduct the process of fundraising.
For example, there is a story to tell, metrics to share and an art to building momentum before you ever start filling your calendar. That all requires preparation, and Kunst will outline how to go about that at our event in July.
Early Stage is going down twice this year, with our first event taking place tomorrow! Here’s a look at some of the topics we’ll be covering:
The cool thing about Early Stage is that it’s heavy on audience Q&A, ensuring that everyone gets the chance to ask their own specific questions. Oh, and ticket holders get free access to Extra Crunch.
Interested? You can buy a ticket here.