Shared micromobility company Luup has raised $8 million (1 billion yen) in debt and asset financing to meet growing demands from Japan’s micromobility market, which a recent report said is expected to reach $11.6 billion. dollars in 2030, compared to $39.4 million in 2020.
Luup will use the proceeds to expand its service to cities across the country, targeting both big and small tourist towns as international travel begins to pick up, according to CEO Daiki Okai. Okai did not specify which cities Luup hopes to expand into, but he said the company will more than double the size of its fleet over the next month.
Founded in 2018, Luup rolled out its fleet of shared e-scooters in April 2021 and shared e-bikes in May 2020. Okai told TechCrunch it had more than 2,000 total e-scooters and e-bikes in February 2022, a number expected to reach around 5,000 by mid-May.
Currently, the company serves Tokyo, Osaka, Kyoto, and Yokohama, and uses a slightly different business model from other globally shared micromobility players.
Luup’s vehicles are dockless, but they don’t float freely. It is illegal to park vehicles anywhere in Japan, so like other micromobility companies, Luup relies on a system of ports, which are delegated parking lots for the startup’s vehicles. Luup’s app allows riders to check available ports in real time to reserve an available port.
The company has a total of 1,100 ports in Japan, but wouldn’t share how many ports it plans to line up for itself in the coming months. Securing these spaces represents a unique type of land grab for micromobility businesses in Japan.
“Given the social and regulatory constraints, it is impossible to operate electric scooter sharing in a dockless model in Japan,” Okai said. “You would have to have a number of ports in town to start the business. Available land is limited and we are working to secure as much land as possible now. »
Japan is working to relax regulations on electric scooters. Currently, e-scooter riders must hold a driver’s license and limit the top speed to 15 km/h. In March, a bill to amend the Road Traffic Law was submitted to Japan’s parliament, the National Diet, to allow electric scooter users to travel at a maximum speed of 20 kilometers per hour without a license, Okai said.
Luup competes with global and local micro-mobility startups like mobby ride, Lime, EXx, Bird Rides Japan, and Hasegawa Kogyo.
The startup’s latest funding comes eight months after the company raised a $16 million Series C funding round.
The new capital, which brings Luup’s total funding to approximately $37 million (4.6 billion yen), was led by Japan Finance Corporation, a financial institution backed by the Japanese government, Mitsubishi HC Capital and Sumitomo Mitsui Finance. Leasing.