goto global expands to Europe with Emmy Acquisition

GoTo Global Mobility Acquires German e-Scooter Company Emmy

Israeli multimodal mobility provider, GoTo Global Mobility, has finalized the acquisition of German electric scooter firm, emmy. This strategic move is designed to facilitate GoTo Global’s expansion objectives, aiming for a presence in every major European city by 2025. The financial specifics of the transaction were not disclosed by GoTo Global.

Expanding into the German Market

The acquisition of emmy, with its fleet of over 3,000 shared electric step-through scooters operating in Berlin, Hamburg, and Munich, provides GoTo with immediate access to the German market. Currently, GoTo Global operates in Spain, Malta, and Israel.

Building Mobility Confidence

According to Gil Laser, CEO of GoTo Global, Germany represents a significant opportunity. He stated that emmy is a well-established company, but lacks the breadth of services needed to foster lasting customer loyalty. GoTo aims to provide a comprehensive mobility solution, ensuring users feel confident in their ability to travel at any time and from any location.

Transforming Emmy into a Multimodal Platform

GoTo intends to leverage its technology to transform emmy from a single-service provider into a multimodal platform. This will involve extending access to cars and other micromobility options to emmy’s existing user base of over 300,000 individuals, catering to both short and long-distance travel needs.

Assumption of Emmy’s Debts

As part of the acquisition, GoTo Global will also assume emmy’s existing financial obligations. This includes repayment of loans secured to finance 1,500 retrofitted Yadea scooters through a lending service provided by Wunder Mobility. GoTo plans to continue its relationship with Wunder Mobility.

Integration and Future Expansion

Emmy users will not experience immediate branding changes. Full integration under the GoTo brand is planned for next year, alongside the introduction of additional mobility options. GoTo will begin offering cars and e-bikes in Germany during the first quarter of the coming year.

Funding and Growth Plans

The company has recently secured $22.5 million in funding and is currently raising additional capital to support expansion into Italy, the Netherlands, and Portugal within the next year.

The "Netflix of Mobility"

Laser envisions GoTo becoming the “Netflix of mobility,” offering users unlimited access to various vehicles for a fixed monthly fee. “In the end users will pay us X amount of dollars and you get free rides on whichever vehicle you want,” he explained.

Multimodality as a Key to Profitability

Establishing a strong brand presence and customer loyalty are crucial steps toward achieving this goal. GoTo believes its multimodal approach, particularly the inclusion of car rentals, is a key differentiator and a driver of profitability, demonstrated by its success in the Israeli market.

Balancing User Acquisition and Revenue

Laser highlights the challenge of balancing user acquisition costs with revenue generation. Shared micromobility services benefit from low acquisition costs due to high visibility, but often struggle with low revenue per user due to a lack of service differentiation.

The Advantage of a Multimodal Approach

Conversely, car rental companies enjoy higher revenue per user but face significantly higher marketing costs. GoTo’s multimodal philosophy aims to bridge this gap by encouraging users to utilize a wider range of services, similar to a supermarket experience.

Incentivizing Multimodal Usage

GoTo employs promotional schemes to encourage multimodal usage. For example, new users who add €3 to their wallet may receive an additional €6, incentivizing them to try other vehicle options like cars. This approach is intended to build brand loyalty more cost-effectively than traditional advertising.

Positive User Engagement Metrics

Currently, 90% of GoTo’s B2C revenue comes from returning users, and 41% of all customers are multimodal users. A membership program, ranging from $2 to $7, also contributes to user retention.

Optimizing Unit Economics

To ensure healthy unit economics, GoTo utilizes a combination of asset ownership and leasing. “By not owning the assets, we enjoy the arbitrage from taking a car or moped and renting it for two years and renting it back to our users for two minutes, and by doing that we can gain a lot of profit,” Laser stated.

Strategic Partnerships and Asset Management

GoTo has established Memorandums of Understanding (MoUs) with Renault, Toyota, Nio, and Segway. The company currently leases its cars and mopeds while owning its smaller micromobility vehicles, with plans to transition to leasing those as well.

Addressing Asset Depreciation

However, the rapid depreciation of shared assets remains a challenge. Securing manufacturer buy-in for leasing schemes is difficult, as manufacturers may prefer to retain ownership and generate rental revenue directly.

Targeting Business Customers

To address this, GoTo is actively targeting business customers through three models: employee benefits in the form of subscriptions or mobility wallets, and dedicated fleet reservations for company use during work hours, with community access after hours.

Growth and Market Leadership

Business customers currently account for 13% of GoTo’s revenue, with a goal of increasing that to 50% by 2025. Laser confidently asserts that GoTo is on track for 100% year-on-year growth in 2021 and is significantly ahead of competitors in addressing the urban mobility challenge.