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Luup raises ¥4.5bn to push micromobility in Japan
- May 15, 2023
- Steve Rogerson
Japanese micromobility start-up Luup has closed a ¥4.5bn funding round, bringing its total funding to date to ¥9.1bn.
Luup says it will use the funds to expand its business by increasing the number of stations and improving its vehicles and apps, while focusing more on strengthening safety measures and raising awareness of new traffic rules in preparation for the enforcement of the revised Road Traffic Act in July.
After the implementation of the revised Road Traffic Act, the number of micromobility users is expected to increase. Luup says it is receiving inquiries from many property owners, municipalities and companies.
“To expand our business, we believe it is important to fulfil our responsibility as a leading company in the industry and work to improve safety and educate people about the correct rules,” said Daiki Okai, CEO of Luup.
With the mission to create an infrastructure that makes the entire city a station front, Luup provides a sharing service for electric, compact and single-passenger micromobility in Tokyo, Osaka, Kyoto, Yokohama, Utsunomiya and Kobe.
The number of stations already exceeds 3000 in the two years since the introduction of e-scooters, and Luup plans to expand its service area into multiple urban cities.
“Just as railroad companies once developed cities along their lines, we aim to contribute to the value of the surrounding properties by creating Luup stations on properties far from the train station,” said Okai. “We are very pleased that we were able to raise this capital despite the unstable market conditions, and we believe that this is a result of the recognition of Luup’s value as a sustainable transportation infrastructure, which is necessary for the future.”
Luup now has more than 60 employees. A small number of professionals in the company cooperate with each other to develop and operate the business in each function, such as software development, hardware development, product development, local collaboration, station expansion, operation construction and corporate development.
“We will continue to maintain our small number of highly skilled members and aim to be an organisation that creates new transportation infrastructure in the future,” said Okai. “We are looking forward to hearing from those who want to build Luup with us, so that 50 years from now, when people look back on the past, they will say Luup is what made this city what it is.”
Luup aims to reduce CO2 emissions by popularising electric micromobility and introducing new electric mobility that can be ridden by the elderly, and ultimately create a sustainable society where all people can get around safely and conveniently.
As in the previous round, Spiral Capital is the lead investor in equity issuance, and additional investments were made by existing investors such as Anri, SMBC Venture Capital and Mori Trust, in addition to new investors including one of the largest pension funds in Japan, 31Ventures, a corporate venture capital of Mitsui Fudosan and Mitsubishi UFJ Trust & Banking. In addition, it has initiated transactions with several financial institutions in debt and asset financing.
“Luup is a rare company that is truly trying to create a social infrastructure,” said Takashi Chiba, partner at Spiral Capital. “It is no mean feat to build a service that can be called a transportation infrastructure, as it requires cooperation of numerous stakeholders, including users, landowners, local governments, relevant ministries, investors and public opinion. Since the launch of the e-scooter business in April 2021, Luup, under the strong leadership of Mr Okai and his management team, has developed stations at an overwhelming speed, promoted the creation of a safe and secure system in cooperation with relevant ministries. The products have become popular among users and are used daily, leading to the company’s dominant position in the field of micromobility. With the implementation of the revised Road Traffic Law, which is expected to further improve convenience, scheduled for July 1 of this year, we expect that the product will continue to evolve as a transportation infrastructure that enriches people’s daily lives.”
Shunsuke Nakaji, principal of Anri, added: We have had the opportunity to watch the Luup team for a long time as they have implemented what they initially envisioned year after year, and we have high expectations for their ability to continue to execute, which is why we made this additional investment. We are honoured to have had the opportunity to make additional investments in all of the rounds of funding, starting from the pre-seed discussion of the idea stage, through the first round of funding, and up to the current round. We still have a long way to go in creating an infrastructure that makes the entire city a station front, but I have high expectations for Luup.”