Kyte: Autonomous Rental Car Delivery - The Future of Car Rental

Kyte Secures $30 Million in Series A Funding for Fleet Logistics Expansion

Kyte, a platform revolutionizing car rentals through delivery to the customer, has successfully closed a $30 million Series A funding round. The company’s immediate focus involves broadening its reach into additional cities and countries, while simultaneously exploring new service categories.

Long-Term Vision: Autonomous and Teleoperated Vehicle Delivery

However, Kyte’s ambitions extend beyond current operations. The ultimate objective is the development of a platform capable of managing vehicle delivery through teleoperation or fully autonomous systems. This necessitates a robust technological foundation.

“A foundational fleet operating system, coupled with a sophisticated technology layer, is crucial for managing both our existing fleet and future fleets of remotely operated or self-driving vehicles,” explained Nikolaus Volk, Kyte’s co-founder, in a statement to TechCrunch. “Central to this is building a comprehensive data platform, incorporating sensing and telematics, to facilitate future teleoperated launches.”

Strategic Partnerships for Future Technologies

It’s important to note that Kyte isn’t directly developing the software or hardware required for teleoperated or autonomous delivery. Instead, the company is actively engaging in discussions with numerous firms already pioneering these technologies, with the intention of establishing collaborative pilot programs.

Kyte’s priority is ensuring its fleet management system can seamlessly integrate with and support emerging technologies. Testing of teleoperated delivery is planned for 2022, with a limited rollout to one or two markets anticipated by 2023.

Prioritizing Commercial Viability and Customer Experience

Before venturing into these advanced areas, Kyte is committed to establishing a viable commercial model, optimizing unit economics, and enhancing the overall customer experience for car rental deliveries.

Current Market Presence and Expansion

Currently, Kyte provides services in nine U.S. cities, including Boston, Chicago, Los Angeles, Miami, New York City, Philadelphia, San Francisco, Seattle, and Washington, D.C. Recent expansion efforts have extended the service area beyond Manhattan to encompass Brooklyn.

Targeting Longer Urban Trips

Kyte differentiates itself by catering to urban trips exceeding the scope of typical ride-hailing services. Approximately 80% of rentals involve journeys extending beyond city limits for several days, making weekend getaways a core component of Kyte’s business.

As the company plans expansion into further cities and international markets, it is also exploring new applications for its services.

Exploring Business Travel and Long-Term Rentals

Ludwig Schoenack, a co-founder of Kyte, revealed the company is investigating a business travel vertical. This would involve arranging for rental cars to be delivered to customers at their accommodations, such as Airbnbs or hotels, upon arrival in a new city. Furthermore, Kyte is focusing on longer-term rental options, including subscriptions lasting up to 12 months.

Customer-Centric Approach to Vehicle Options

The car subscription model is gaining traction across various markets, with some companies, like U.K.-based Onto, specializing in electric vehicle access. Schoenack and Volk emphasize a customer-centric philosophy, prioritizing responsiveness to customer needs over solely promoting EV adoption.

Recognizing that many Kyte users are American travelers undertaking weekend trips, the company acknowledges the importance of addressing potential range anxiety concerns, whether justified or not.

Addressing EV Supply Constraints

Limited availability of electric vehicles presents a potential challenge to expanding EV options on the platform. Kyte currently offers hybrid vehicles in most markets, but widespread EV availability remains limited.

“Our platform is designed for adaptability to evolving customer preferences,” stated Schoenack.

Fleet Sourcing and “Cloud Parking” Infrastructure

Kyte’s fleet comprises vehicles sourced from rental companies and organizations with underutilized commercial fleets, providing these assets with a second operational life. The company is also establishing direct relationships with manufacturers, both leasing and purchasing vehicles through a controlled leasing entity.

All Kyte vehicles, regardless of origin, are managed within the company’s “cloud parking infrastructure” – strategically located, cost-effective facilities optimized for delivery operations. Currently, Kyte operates approximately one such facility per city, with larger cities like New York and Los Angeles hosting multiple locations.

Cost Arbitrage and Profitable Operations

“This model offers long-term resilience as there will always be underutilized space available,” Schoenack explained. The absence of storefronts or branding further contributes to cost savings, enabling a pure delivery model and “allowing us to leverage cost advantages,” he added.

By minimizing overhead expenses, Kyte can offer competitive pricing compared to established players like Zipcar and Hertz, resulting in profitable market operations.

“While we cannot disclose specific revenue figures, Kyte generates seven-figure monthly revenues, representing a tenfold increase over the previous year,” Volk revealed.

Funding to Fuel Growth and Innovation

Investment in technology, product development, and accelerated growth prompted the need for additional funding. The latest round follows a $9 million seed round earlier in the year, bringing Kyte’s total funding to over $40 million.

The Series A funding was led by Park West Asset Management and Sterling Road.