Nevoya Secures $9.3M Funding, EV Truck Fleet Achieves Diesel Cost Parity

Nevoya Secures $9.3 Million Seed Funding to Accelerate EV Truck Adoption

Emerging from stealth mode last year, Nevoya, headquartered in Los Angeles, embarked on a significant mission: to overcome the obstacles hindering widespread adoption of electric vehicles in the trucking industry.

The company’s advancements in this area have successfully attracted investment, culminating in a $9.3 million seed round designed to further accelerate its progress.

Serving Major Corporations with Electric Fleets

Nevoya operates by procuring electric trucks and subsequently offering them as a transportation solution to shippers.

Currently, the company is providing logistical services to ten distinct companies listed within the Fortune 500.

Crucially, Nevoya is delivering these services to businesses in California at a cost comparable to that of traditional diesel trucks of similar capacity.

Navigating Challenges in the EV Landscape

This achievement is particularly significant given the current climate of increasing resistance towards electric vehicle initiatives.

Recent public criticism of green energy policies from governmental sources has contributed to these headwinds.

Founder’s Perspective and Continued Commitment

Despite these challenges, Nevoya’s founder, Sami Khan, remains resolute.

Khan conveyed to TechCrunch that the appeal of reducing carbon emissions continues to resonate with Fortune 500 companies.

He further believes that Nevoya is operating a more efficient and streamlined trucking business than established competitors, largely due to its strategic implementation of artificial intelligence.

AI-Powered Optimization for Efficiency

Nevoya leverages AI to optimize trucking routes, ensuring efficient load matching and balancing with appropriate vehicles.

This approach maximizes efficiency while simultaneously minimizing energy consumption.

The company also utilizes AI to streamline charging schedules and enhance battery management.

Automation and the Future of Dispatch

“Our analysis of existing trucking operations revealed that a substantial 90% of processes could be automated or partially automated,” Khan stated.

Nevoya’s automation systems provide drivers with information more rapidly and with greater accuracy than traditional methods.

Furthermore, the integration of AI isn’t intended to replace dispatchers, but rather to empower them to improve communication with Nevoya’s clientele.

• Key Focus: Reducing carbon emissions in the trucking industry.
• Business Model: Purchasing and leasing electric trucks to shippers.
• Technology: Utilizing AI for route optimization, load balancing, and battery management.

Navigating the Challenges of Significant Funding Rounds

Khan anticipates continued expansion of Nevoya’s operational model, fueled by the recent seed funding – a capital raise that initially had a more restrained scope.

As Nevoya’s all-electric trucking fleet began to demonstrate initial success and gain momentum following a pre-seed funding round, Khan considered various growth strategies. He debated whether to pursue an internal funding round with current stakeholders or to seek a larger investment.

During this evaluation, Khan engaged in discussions with Shawn Xu of Lowercarbon Capital. Xu had previously facilitated the introduction of Khan and co-founder John Verdon, formerly Waymo’s head of business development, and had been monitoring Nevoya’s progress. However, Xu had not yet committed to investing.

Xu’s advice was direct and impactful: aggressively pursue a substantial funding round. He offered to lead the effort and actively participate. Khan described this as a significant validation, noting that Xu had initially observed from the sidelines before proactively leading the subsequent round.

Lowercarbon Capital ultimately spearheaded Nevoya’s $9.3 million seed round, which has now been finalized, as Khan revealed in an exclusive interview with TechCrunch. Additional investors included Floating Point, LMNT Ventures, and existing backers Third Sphere, Stepchange, and Never Lift. Qasar Younis, CEO and founder of Applied Intuition, a prominent self-driving AI firm, also participated in the investment.

The secured capital will be allocated to broadening Nevoya’s operational footprint beyond California, with planned expansion into states such as Texas. Currently, the company is actively transporting freight in the Houston and Dallas metropolitan areas.

Nevoya's Growth into Texas

The company’s expansion into Texas is projected to increase revenue generation for Nevoya. However, Khan emphasized that substantial effort remains to achieve cost equivalence with diesel-powered trucks within these newly entered markets.

He further noted the necessity for innovative fleet management strategies in regions like Texas, where the availability of charging infrastructure is currently limited.

This necessitates employing alternative charging methods, such as utilizing passenger vehicle charging stations during off-peak hours. Additionally, Nevoya is exploring opportunities to charge at school bus depots when their chargers are not in operation.

Khan characterized this approach as mutually beneficial. These facilities gain supplemental income during periods of low demand, while Nevoya facilitates rapid expansion with reduced initial investment.

The long-term objective involves investing in the development of dedicated charging infrastructure to support its growing fleet.

Operational Strategy for Expansion

To effectively manage this expansion, Nevoya is adopting a model similar to that utilized by companies like Uber during their initial market entries.

The company is recruiting general managers who will operate individual locations with a high degree of autonomy, functioning as independent startups within the larger organization.

“This competitive dynamic, fostering performance among highly capable general managers, is proving exceptionally effective in driving business performance,” Khan stated.

Investor Perspective and Future Plans

Xu initially hesitated to invest until Nevoya demonstrated its ability to achieve cost parity with diesel vehicles.

“Our initial focus was on gauging market acceptance and validating the demand,” he recalled. However, he also believed that “a business of this nature was fundamentally viable.”

As Nevoya progressed, Xu inquired about the potential for a significantly larger funding round than initially anticipated.

Discussions centered on leveraging artificial intelligence to optimize fleet management and proactively preparing for a future incorporating autonomous technology, which explains the inclusion of Applied Intuition’s Younis in the investment round.

“They are achieving reduced costs per mile and lower maintenance expenses. The AI-driven route optimization is beginning to yield positive results,” Xu explained.

“Consequently, we secured a considerably larger investment than expected, and we are now actively pursuing our growth strategy.”