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One Moto Technologies (One Moto), a UAE-based electric vehicle (EV) manufacturer that caters primarily towards the last-mile delivery sector, has secured US$40 million through a lease financing option. The financing round was led by Pyse, an India-based clean and green asset financing platform, and a number of other regional investors.
Launched in 2018, One Moto offers a range of electric delivery vehicles, such as motorcycles, ebikes, scooters, delivery and grocery vans, to help businesses sustainably optimize their delivery operations. One Moto’s EV fleet solutions also incorporate the vehicle riders and associated EV software solutions. While the enterprise is currently operational in 10 countries -including India, the UK, Sri Lanka, Ethiopia, Bahrain, Jordan and Chile- through dealerships and distributors, it is already in talks to expand to 27 other destinations.
“A One Moto EV fleet offers numerous advantages over conventional internal combustion engine vehicles, and having the access to new capital to support the industry transition to EV now allows the team and I to focus on delivering our promise,” Adam Ridgway, founder and CEO of One Moto, says. “By promoting the adoption of electric vehicles, we contribute to the UAE’s vision for a more sustainable and environmentally conscious future.”
“Saudi Arabia is another very interesting market for us, and conversations are developing at a far more rapid pace there than certain areas in the UAE, with a want for manufacturing and distribution,” he continues. “Our launch in the Kingdom later this year will therefore be a huge achievement for the team. Furthermore, we are also very strategically placing ourselves in overlooked and upcoming markets, with Latin America being our focal market beyond the GCC in the near future.”
While One Moto’s ultimate vision for the UAE is to fully decarbonize the last-mile industry by incorporating greater use of EVs, it aims to do so via step-by-step goals. The first of these is to introduce 50,000 electric delivery vehicles in the country by 2025. And unsurprisingly, the mammoth amount that has been invested into One Moto is expected to be a major catalyst in this regard.
Source: One Moto
Now, for the uninitiated, lease financing is a form of asset financing that enables the owner of an asset (in this case, One Moto’s EVs) to give another party the right to use the asset in exchange for a periodic payment. But to understand why Ridgway and his team opted for such a financing solution -as opposed to the more commonly used startup funding methods such as raising through venture capitalists or angel investors- one needs to first look deeper into One Moto’s introduction of a fleet leasing model.
Indeed, it was Ridgway who realized that to entice more industry players to adopt EV within their delivery processes, he’d have to make it a cost-effective option for them- an observation that led to One Moto’s “Lease To Own” model. “With this model, our customers have the chance to charge their EV fleet as an operational expense (OpEx) which in turn has many advantages such as zero capital expenditure (CapEx), ownership of the vehicle once the payments are made, flexible financing as well as cost savings,” Ridgway tells Entrepreneur Middle East. “This allows them to adapt and scale their businesses with agility and more sustainably.”
Notably, this approach has also seen the addition of telemetry -remote monitoring of EV-related data- to One Moto’s fleet leasing solutions. But the decision to introduce the “Lease To Own” model in the UAE market came after a tried and tested result. “Earlier this year, we secured similar financing for the UK market to the value of GBP123 million (approximately US$157.3 million), which allowed us to deploy up to 30,000 vehicles on a lease basis,” Ridgway reveals. “We were thus able to ensure that the gig economy delivery riders in the UK had access to affordable, sustainable mobility resulting in a lease option of just GBP3 per day.”
Having seen the benefits of such an approach (and a coinciding demand for a similar financing option from many of its existing customers the UAE), One Moto thus decided to settle upon lease financing as its best solution. “On one side there were numerous early-stage third party logistics startups that had the want to scale and transition to EV but didn’t have the CapEx since ‘petrol vehicles were cheaper,'” Ridgway recalls. “On the other side, there were far more established operators who already had thousands of petrol bikes on their balance sheet, and didn’t want to onboard a new fleet due to the CapEx requirements (plus the need versus want from their customers wasn’t aligned). So we had to strategically find ways of offering a solution to this issue. We could have raised against equity to fund these customers, but this takes time, and we need to be agile and remain focused on our expertise and vision. And so, asset financing was a consideration to help scale up easily and with the agility the industry demands.”
Adam Ridgway, founder and CEO, One Moto. Source: One Moto
The results of Ridgway’s decision will only begin to show over the coming months, but the founder is already hopeful that the UAE will prove to be the perfect litmus test for his startup’s future. “For now, our focus is very much based in the UAE, but once we’ve garnered greater market traction and critical mass, then we’ll have proven the model to open the facility to other markets within the region,” Ridgway says. “As a tech company, we are always innovating, and the introduction of telemetry has been a particularly huge benefit to the fleet operators, riders, and governments. The aggregation of rich data ensures increased productivity, operational efficiencies, safer riding environments, and potentially cheaper delivery costs to the customer. But, however valuable telemetry is, it isn’t a desired investment from delivery platforms, fleet operators, governments. However, someone has to pay for it- so we provide the hardware and the software, and adding this cost to the price of leasing ensures we can OpEx this ‘cost’ ensuring everyone embraces the technology.”
But Ridgway’s optimism doesn’t come without a sense of precaution. For starters, he understands that there is still a long way to go before an all-out adoption of electric delivery vehicles within the UAE. “Challenges in the short term reside within the discomfort that many show while embracing change- mainly operationally,” Ridgway says. “Cost certainly won’t be the challenge thanks to our financing option, which we believe is a first for the industry. Our vehicles have been in the UAE market for four summers now, which is testament to our quality, both in performance and design, for the regional market. So, I believe those working within the organizations that are active in bringing change will support our mission to decarbonize last-mile delivery in the UAE. Being the market pioneer (said with factual humility), we’re able to carve out a sustainable future for the industry.”
As One Moto and Ridway now look to the future, the significance of the year we are in must be noted. 2023 has, after all, been named UAE’s “Year of Sustainability,” which has resulted in a number of initiatives to increase sustainable practices and foster global collaboration to solve environmental challenges. In November this year, the UAE will also host the 28th edition of the United Nations Conference of the Parties (COP28). And Ridgway is hopeful that being in such a dynamic ecosystem will aid in fulfilling One Moto’s upcoming plans.
“This year has been our most progressive to date and it is certainly shaping our future,” he says. “We’re excited to be a part of the tapestry of change, and pioneer this sector. Over the next six months, we will be revealing some incredible advancements in our endeavors for the UAE, including the announcement of the first EV manufacturing plant here in Dubai. Being a first-mover does present its challenges, but I personally thrive on it as it has allowed us to champion change, policy reforms, and work closely with the UAE government. We will certainly be revealing more over the next few months!”