General Motors is leading a $23 million funding round for an on-demand car maintenance service called Yoshi. It’s the second time GM’s venture capital arm has invested in the Silicon Valley start-up since 2018.
The Series B funding round will help finance the company’s hiring and expansion plans for the coming years as it emerges from the coronavirus pandemic, according to Yoshi co-founder and CEO Bryan Frist.
“Covid has been interesting for us. We obviously took a huge hit when Covid hit but we are now approaching the levels that we were at coming into it,” he told CNBC. He said while many people are driving less, there’s growing demand for its contactless services.
Yoshi was founded in 2015 as an on-demand fueling company in California. It would fill a vehicle’s tank wherever a driver wanted instead of the owner having to stop at a gas station. It has since expanded to also offer other services through its app such as oil changes, car washes and windshield treatments in five major markets across the U.S.
The start-up has raised more than $38 million for its expansion plans. It most recently launched a service for thousands of GM employees in Michigan. Since June, the Detroit automaker has offered to pay Yoshi’s monthly subscription fee for salaried and hourly employees at some of its major campuses and plants in its home state.
GM confirmed the investment and employee program, but declined to offer further details.
Yoshi exclusively operates for GM in the state, but Frist said that market is the company’s “easy next step” for expansion. Yoshi’s current markets open to the public include Los Angeles, Houston, Nashville and San Francisco Bay Area.
Yoshi offers pay-as-you-go and monthly services. It costs $20 a month for a membership (or $16 for an annual subscription). Fees for services vary, including gas based on the lowest top tier price within a 2-mile radius of where a vehicle is parked.
Frist declined to disclose Yoshi’s total active customers, but said the company is conducting tens of thousands of services per month and has more than 200,000 vehicles registered to its platform. The company employs about 100 people, he said. About 75% of Yoshi’s revenue comes from its fueling services, according to Frist.
“We see our ourselves just scratching the surface,” he said. “We really see gas as the touchpoint that leads to everything else.”
Yoshi currently services all-electric vehicles, but it does not offer charging. Frist said the company eventually plans to offer EV charging like it does gasoline fill-ups. GM recently announced plans to invest $27 billion in electric and autonomous vehicles by 2025.
The emerging EV market is a growth area for the company along with integrating with connectivity features of new vehicles, including GM’s OnStar. Such integration allows Yoshi to either remotely suggest services based on a vehicle’s needs or a user to set when it would like a fill up based on how much gas is left in the tank, Frist said.
Yoshi also has partnered with dealerships that have included discussions about integrating a referral program for users who may need a dealer service Yoshi doesn’t offer, according to Frist.
“There are some things we won’t ever do mobile,” he said. “For those, we’re a great referral back to the dealership. We see this as all working together.
Previous investors in Yoshi have included ExxonMobil, NBA star Kevin Durant and Arab Angel, among others. Yoshi’s Series A funding round was in 2018.
Source: Business - cnbc.com
