Sharing economy

Asia’s first electric scooter sharing startup opens to investors

As governments across Asia look to decrease carbon emissions, Taiwan’ electric scooter sharing service WeMo is out to capitalise and turning to venture capital after four years of bootstrapping to do so. Its CEO and founder takes FinanceAsia through the vision.

Electric scooter sharing app WeMo recently kicked off its first round of outside funding with an eye on foreign expansion.

The app has 100,000 monthly active users in Taipei, along with a growing user base in the southern city of Kaohsiung where WeMo launched late last year. With a modest $4.5 million raised to date internally, the mobility startup has kept its focus within Taiwan up until now. 

“We aspire to go international and we have several leads in Asia,” WeMo founder and chief executive officer Jeffrey Wu told FinanceAsia. Wu is a member of the family that owns Shin Kong Group, which has dealings in insurance, banking, retail and healthcare.

WeMo expects to raise “well into the eight-figure range” with proceeds to fuel expansion abroad and consolidate its market hold in Taipei, where it plans to have operations break even in the next year.

The company has already been approached by a number of foreign venture capital funds eager to invest and foreign governments are interested in seeing the startup launch in their countries.

“Investors are interested in us [because] we are one of the few sharing providers that develop the tech as well,” Wu said. The startup can quickly test and turn around solutions to meet the evolving demands of consumers.

“A third-party solution will at best give you fleet management software. But for our business we need [customer relationship management], labour management, vehicle support and advanced analytics.” 

WeMo - a conjunction of ‘We’ and ‘Move’ - will likely target countries with high scooter and motorcycle usage, like Thailand and Japan. The global electric scooter industry is valued at more than $17 billion, according to a GrandView Research report, led by demand in Asia and Europe.

THE OPPORTUNITY

Taiwan has more than 14 million motorcycles on the roads today - the vast majority of which are gas powered. “It’s just insane,” said Wu.  “It’s basically one motorcycle for every adult in the country.”

But this figure is set to drop. In 2018, Taiwan’s government committed to a sales ban on all gas-engine scooters by 2035. As the deadline creeps up, WeMo believes its services will be in demand like never before.

“The availability of services is changing the landscape of how we move around in the world,” said Wu. 

It is also changing how these services are delivered. Electric scooters require batteries to operate and WeMo has chosen a unique method of keeping its batteries charged for users.

“If you bring a vehicle back to some central hub, the logistics cost will be way too high,” Wu said. The scooter will also be out of service longer. Instead, WeMo has opted for a battery-swapping model.

Specialists are deployed in vans around Taipei and Kaohsiung to replace empty scooter batteries with full ones, guided by automatic alerts from vehicles when they dip below a certain threshold. 

The system is still being tweaked. “As we scale up, the travel time [is reduced] and battery swapping becomes much faster,” Wu added. The twin pressures of increased demand and competition from other startups will make increased efficiency a priority for WeMo this year.

THE COMPETITION

WeMo is one of the three electric scooter sharing platforms in Taiwan, and the oldest by far. Electric scooter manufacturer Gogoro launched its ride sharing service GoShare in August 2019, while rental firm iRent has offered e-scooters in Taipei for the past year.

GoShare poses the greatest threat, with more than 100,000 subscriptions to its service in the first 53 days of business.

But Wu welcomes the challengers. “Because of competition, at least people are taking us more seriously,” he noted.

It helps that WeMo has a logistical leg up on iRent and GoShare. “We've developed a solution that allows our users to enter private parking lots with our system,” Wu said. WeMo riders have automatic - and free - access to lots across the city, with the goal of providing 500 private parking spaces by the next quarter.

The startup has also made a point of working closely with existing public transit systems.

“Public transportation is our partner,” Wu said. “If we are able to convince more people to use public transportation, they would also use sharing because they won’t own their own vehicle.”

WeMo’s logic is sound. Private vehicles spend much of their existence parked; in Asia’s crowded cities, that space can be better used. With more than 7,000 scooters on the roads being ridden 6 times a day on average, WeMo is helping to alleviate this burden.

GOING GREEN

The twin concerns of carbon emissions and space conservation are pushing Taiwan to invest in renewable transport solutions.

Motorcycle ownership in Taiwan is already slightly down from 2011 when registered scooters peaked at 15.2 million, according to data from the Ministry of Transport and Communication. 

Lured by government subsidies, citizens have been encouraged to buy electric scooters instead of gas-powered alternatives and the country is working to build the necessary infrastructure to support this pivot.

In 2018, the government announced construction of 1,000 electric charging stations around the island by 2023. There are significant hurdles on the path to achieving this goal for both public and private sectors and WeMo’s success hinges on government action. 

“If we want to lower the cost [of operations] further, the city’s infrastructure has to be able to support that,” Wu explained.

In Taipei, just 264 charging stations are now available for electric vehicles in public parking lots across the city. While a worthy start, this is a far cry from Wu’s dream. “In an ideal world three to five years down the road, there will be 10,000 charging stations around the city,” he said.

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