General Motors is leading a $23 million investment round in an on-demand car maintenance service called Yoshi
General Motors is#nbsp;leading a $#nbsp;23 million funding round for an#nbsp;on-demand car maintenance service called Yoshi. It’s the second time GM’s venture capital arm has invested in#nbsp;the Silicon Valley start-up since 2018.
The Series B#nbsp;funding round will help finance the company’s hiring and expansion plans for the coming years as#nbsp;it#nbsp;emerges from the coronavirus pandemic, according to#nbsp;Yoshi co-founder and CEO Bryan Frist.
"Covid has been interesting for#nbsp;us. We#nbsp;obviously took a#nbsp;huge hit when Covid hit but we#nbsp;are now approaching the levels that we#nbsp;were at#nbsp;coming into it," he#nbsp;told CNBC. He#nbsp;said while many people are driving less, there’s growing demand for its contactless services.
Yoshi was founded in#nbsp;2015 as#nbsp;an#nbsp;on-demand fueling company in#nbsp;California. It#nbsp;would fill a#nbsp;vehicle’s tank wherever a#nbsp;driver wanted instead of#nbsp;the owner having to#nbsp;stop at#nbsp;a#nbsp;gas station. It#nbsp;has since expanded to#nbsp;also offer other services through its app such as#nbsp;oil changes, car washes and windshield treatments in#nbsp;five major markets across the U.S.
The start-up has raised more than $#nbsp;38 million for its expansion plans. It#nbsp;most recently launched a#nbsp;service for thousands of#nbsp;GM employees in#nbsp;Michigan. Since June, the Detroit automaker has offered to#nbsp;pay Yoshi’s monthly subscription fee for salaried and hourly employees at#nbsp;some of#nbsp;its major campuses and plants in#nbsp;its home state.
GM#nbsp;confirmed the investment and employee program, but declined to#nbsp;offer further details.
Yoshi exclusively operates for#nbsp;GM in#nbsp;the state, but Frist said that market is#nbsp;the company’s "easy next step" for expansion. Yoshi’s current markets open to#nbsp;the public include Los Angeles, Houston, Nashville and San Francisco Bay Area.
Yoshi offers pay-as-you-go and monthly services. It#nbsp;costs $#nbsp;20 a#nbsp;month for a#nbsp;membership (or $#nbsp;16 for an#nbsp;annual subscription). Fees for services vary, including gas based on#nbsp;the lowest top tier price within a#nbsp;2-mile radius of#nbsp;where a#nbsp;vehicle is#nbsp;parked.
Frist declined to#nbsp;disclose Yoshi’s total active customers, but said the company is#nbsp;conducting tens of#nbsp;thousands of#nbsp;services per month and has more than 200,000 vehicles registered to#nbsp;its platform. The company employs about 100 people, he#nbsp;said. About 75% of#nbsp;Yoshi’s revenue comes from its fueling services, according to#nbsp;Frist.
"We see our ourselves just scratching the surface," he#nbsp;said. "We really see gas as#nbsp;the touchpoint that leads to#nbsp;everything else."
Yoshi currently services all-electric vehicles, but it#nbsp;does not offer charging. Frist said the company eventually plans to#nbsp;offer#nbsp;EV charging like it#nbsp;does gasoline fill-ups. GM#nbsp;recently announced plans to invest $#nbsp;27 billion in#nbsp;electric and autonomous vehicles by#nbsp;2025.
The emerging#nbsp;EV market is#nbsp;a#nbsp;growth area for the company along with integrating with connectivity features of#nbsp;new vehicles, including GM’s OnStar. Such integration allows Yoshi to#nbsp;either remotely suggest services based on#nbsp;a#nbsp;vehicle’s needs or#nbsp;a#nbsp;user to#nbsp;set when it#nbsp;would like a#nbsp;fill up#nbsp;based on#nbsp;how much gas is#nbsp;left in#nbsp;the tank, Frist said.
Yoshi also has partnered with dealerships that have included discussions about integrating a#nbsp;referral program for users who may need a#nbsp;dealer service Yoshi doesn’t offer, according to#nbsp;Frist.
"There are some things we#nbsp;won’t ever do#nbsp;mobile," he#nbsp;said. "For those, we’re a#nbsp;great referral back to#nbsp;the dealership. We#nbsp;see this as#nbsp;all working together.
Previous investors in#nbsp;Yoshi have included ExxonMobil, NBA star Kevin Durant and Arab Angel, among others. Yoshi’s Series A#nbsp;funding round was in#nbsp;2018.
Published by CNBC#nbsp;— on#nbsp;December 17, 2020