Unagi Secures $10.5M to Expand E-Scooter Subscriptions

Unagi Expands Electric Scooter Subscription Service to Six New Cities

Unagi, the company recognized for its stylish and portable electric scooters, is broadening the availability of its subscription service. This expansion encompasses six additional U.S. cities and is supported by $10.5 million in recent funding.

New Market Reach

The startup, founded in late 2018 by David Hyman, formerly of Beats Music and MOG, announced on Wednesday that its subscription model will now be accessible in Austin, Miami, Nashville, Phoenix, San Francisco, and Seattle.

Furthermore, Unagi is increasing its presence within the New York and Los Angeles metropolitan areas. This includes all five boroughs of NYC, Long Island, Westchester, and Northern New Jersey, alongside the Westside and Southeast LA, the San Fernando Valley, and Orange County.

Significant Market Potential

Collectively, these regions represent a potential consumer base of approximately 30 million individuals. The Series A funding round was spearheaded by the Ecosystem Integrity Fund, with contributions from Menlo Ventures, Broadway Angels, and Gaingels, among others.

This expansion follows a six-month pilot program for the “All-Access” subscription service, initially launched in New York City and Los Angeles.

A Leading Subscription Model

While other scooter companies have explored subscription options, Unagi is rapidly establishing itself as a leader in this space within the United States. Bird, for example, introduced a similar service in 2019 but has since reduced its public promotion of the offering.

Accessibility and Target Demographic

Often referred to as the “iPhone of scooters” by TechCrunch, Unagi offers its Model One electric scooter, equipped with a dual motor, for $49 per month. This pricing strategy aims to make the scooters more attainable for those who may not wish to invest the $990 required for outright ownership.

According to Hyman, sales of Unagi’s scooters have historically appealed to men over 35. However, the subscription service is designed to attract a younger demographic – the millennial professional who values quality and convenience without the long-term commitment.

Focus on Urban Portability

“Our market is purely urban, and our internal corporate mantra is: If you can’t carry our scooter up a three-story walk-up, then it’s not something we want to do,” Hyman explained to TechCrunch. “I think there’s a generation of consumers that prefer access over ownership and don’t want the responsibility and the maintenance concerns.”

Hyman also noted that this generation grew up with kick scooters, giving them an inherent familiarity with the riding experience, which contributes to the growing popularity of e-scooters.

Growth of the Electric Scooter Market

The global electric scooter market is projected to experience an annual growth rate of approximately 8% over the next decade, ultimately reaching a value of $42 billion by 2030.

Based on research conducted by Unagi and Berkeley Haas School of Business, Hyman anticipates that shared services will comprise one-third of the total e-scooter market, with ownership and subscriptions accounting for the remaining portion.

He believes the subscription model is more appealing than shared options, as it eliminates the need to search for available scooters and concerns about hygiene.

Hassle-Free Subscription Details

Unagi emphasizes a straightforward experience with transparent pricing and the flexibility to cancel subscriptions at any time. The monthly fee encompasses maintenance and insurance coverage for lost, stolen, or damaged scooters.

A $50 set-up fee is required for new subscribers.

Subscription as a Primary Revenue Driver

Hyman anticipates that the subscription model will eventually become Unagi’s primary source of revenue, although he acknowledges it will take time to fully scale. From 2019 to 2020, Unagi experienced 450% growth, with demand for subscription scooters in the pilot cities exceeding expectations.

Impact of the Pandemic

“I actually think the pandemic only hurt us because one of the primary use cases for our product is commuting,” Hyman stated, addressing concerns about a potential decline in e-scooter popularity as commuting patterns normalize.

Convenience and Practicality

“In a city, the vast majority of people’s rides are under three miles, and having a portable electric scooter just kills everything,” he said. “It’s so much easier to carry around and you don’t have to worry about locking it up outside, don’t have to worry about theft or carrying it up to your apartment or on the subways.”

The scooters weigh around 26 pounds and can be balanced on a single wheel when folded. A single charge provides a range of eight to 15 miles, depending on rider weight and motor usage.

Repurposing and Sustainability

The subscription model complements e-scooter sales by enabling the repurposing of scooters. Subscribers typically receive certified pre-owned models. Unagi’s commitment to durable, high-quality materials ensures that scooters remain functional for an estimated three to five years with regular maintenance.

Inspired by Amsterdam

Hyman’s experience living in Amsterdam, where cycling is prevalent, has influenced his vision for Unagi. He previously developed successful subscription services, such as MOG, which later evolved into Apple Music.

“Considering how many commutes are under three miles, the fact that there are so many cars in cities is ridiculous,” said Hyman. “We are hell-bent on getting cars out of cities.”

Update: The article previously stated that Unagi required a three-month subscription. The company has decided to end that requirement.

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