- Voltz will expand the number of stores and create the embryo of a battery recharging network, having as an initial partner the Ultrapar group, owner of the Ipiranga gas stations;
- Creditas recently launched a used car buying and selling operation that includes a factory in the metropolitan region of São Paulo.
Brazilian unicorn Creditas has decided to make a big bet outside its financial products area, injecting BRL 95 million into Brazilian electric motorbikes manufacturer Voltz, the largest investment ever made by the fintech created in 2012.
The investment makes Creditas, which focuses on an ecosystem around the “home, car and salary” tripod; into a relevant, but not the majority, shareholder in Voltz.
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The investment provides capital for the Pernambuco-based startup to open a factory in Manaus in November, expanding the number of stores and create the embryo of a battery recharging network, having as an initial partner the Ultrapar group, owner of the Ipiranga gas stations. Ultrapar is participating in the investment round with an investment of BRL 5 million, bringing the total round to BRL 100 million.
“We could spend years here developing 150 financial products, the same way digital banks do, but I don’t want to replicate the banking model,” said Sergio Furio, Founder, and CEO of Creditas. He declined to say how big Creditas‘ stake in Voltz will be and the estimated amount of the automaker’s contribution.
“We want to create a business model that can help people manage their assets, and in the case of the e-bike, I don’t want it to be on a combustion-powered model of the past,” the executive said. He believes that in the next 5 to 10 years the combustion motorbikes in Brazil will be restricted to participation of only 20% of the national market, with the rest being occupied by the electric ones.
Furio referred to the strategy of Creditas, which two weeks ago launched a used car buying and selling operation that includes a factory in the metropolitan region of São Paulo that reconditions second hand cars for resale, in a format similar to that operated by startup Volanty.
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“We realize that customers’ needs are changing. If we are not on this journey, we lose the customer,” said Furio. According to him, while digital banks generate annual revenue of BRL 80 to BRL 100 per customer, Creditas‘ new initiatives allow an annual revenue of BRL 6,000 per customer.
Two in one
Besides fundraising Voltz electric motorcycles, Creditas is also betting on another branch of business derived from technology: battery recharging.
In the system envisioned by Creditas and Voltz, battery recharging stations will be installed at Ipiranga gas stations. But instead of the motorbike user waiting for the motorcycle battery to be recharged, he leaves it at the automated point that delivers a fully recharged one instead.
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“We envision a business model in which we sell and finance the motorcycle and rent the battery. And Creditas will act as a capital provider to buy the batteries and rent them,” said Furio, also mentioning that the company can set up a receivables fund based on the battery rental revenues. The battery represents about 40% of the value of Voltz’s bike.
The rental model may be useful for users such as app delivery drivers, who in a day may need more mileage than the nominal 120 kilometers (74.5645 miles) of the Voltz battery. The automaker recently closed a partnership with national meal delivery giant iFood, which will subsidize part of the financing of the e-bike for delivery partners.
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“Banks didn’t give a damn”
According to Voltz founder and CEO Renato Villar, the pilot of the partnership with iFood begins in June and the expectation is that the alliance will reach 10,000 e-bikes per year in which Voltz sells the e-bikes without the additional cost of the battery in the price of them, while the owner rents the battery.
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Villar said that, before closing the deal with Creditas, Voltz talked to large banks about its business model to get lower rates for financing the motorcycles.
The startup‘s rationale for seeking lower interest rates for financing lies in the telemetry technology built into the motorbikes and the batteries, which reduces, according to him, the risks of default and theft.
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“We tried with some banks, but they didn’t give us much credit,” joked the executive. “To sell a motorbike in Brazil, we need to sell credit, so we built a motorcycle that can be more accessible,” said Villar. The price of the EVS model is BRL 17,900, close to the price of a Honda Twister, one of the best-selling models of the Japanese manufacturer in Brazil.
Villar affirmed that the proceeds of the round announced on Monday will be enough for a year and a half to two years of operations. If the model of leasing batteries and recharging points is successful, a new round of funding will be required to expand the network, he added.
(Translated by LABS)