Yulu’s electric leap: How pivoting to quick commerce and road safety is powering its profit surge

If you’ve travelled by road in most major cities over the past two years, chances are you’ve seen small electric bikes zip past you, carrying a load of goods to be delivered. They have become the ubiquitous symbols of the burgeoning delivery space, bringing everything from groceries and books to food to people’s doorsteps.

Among the bikes, perhaps the most prominent are those of shared electric mobility start-up Yulu, especially the Yulu Dex bikes. Unlike other players in the space, Yulu’s customer base isn’t the companies that deliver the goods, but the delivery partners. That’s because Yulu’s bikes are available for anybody to rent.

Thanks to this customer-only focus, it has become a favourite for last-mile delivery and has expanded its reach into 12 cities now.

This pivot to the delivery sector is all the more surprising when one considers that it was dictated more by circumstances. “This was never the plan,” say Amit Gupta, Co-founder & CEO, and Anuj Tewari, Co-founder & Chief Financial Officer, in unison. Yulu’s bikes, especially popular with delivery partners working for platforms like Swiggy Instamart, Zepto, Blinkit, and Flipkart Minutes, have become an essential cog in the quick commerce machine. “Within our operational areas, Yulu is the largest EV partner for quick commerce platforms,” says Gupta, with an unmistakable hint of pride in his voice. With the tailwind of that rapid growth, Yulu says it turned Ebitda positive in the second quarter of the current financial year.

But that rapid rise has had its own set of problems. For many commuters, these bikes are an unwelcome addition to the already congested roads. Besides, some riders are known to ride on the wrong side, increasing the risk of road accidents.

The wrong-way riding had the Yulu team worried enough that they have developed a solution for it. “Now, you won’t see it,” Gupta asserts. Yulu believes its new ‘wrong way ride detection’ feature, a patent-pending technology that alerts riders when they’re moving against the flow of traffic, will put a stop to that practice. Any instance of such behaviour is flagged, and warnings or penalties follow. This feature is now fully operational across Yulu’s fleet of 18,000 bikes in Bengaluru.

Reinvention

Yulu’s ride to strong growth wasn’t straight. In 2020, as the world grappled with the Covid-19 pandemic, Yulu’s future seemed uncertain. Having launched in 2018 with an aim to provide first-mile and last-mile connectivity in cities, the company’s operations came to a near halt during the lockdown. Revenue plummeted to almost zero, and it had about 400 on-ground employees—mechanics, battery swappers, and others—who were forced to idle away at home. The bikes didn’t come with chargers back then, and the battery swapping personnel had to collect them, charge them at central facilities, and return them to the designated Yulu zones.

Around that time, food delivery companies like Swiggy and Zomato were facing a human resource crunch, as many delivery agents had returned to their hometowns during the lockdowns.

“We were getting a lot of calls from these companies,” recalls Gupta. “So, we thought, why not repurpose our employees as delivery agents instead of letting them go?”

And just like that, the idea took shape. Rather than cutting jobs, Yulu handed its staff chargers so they could power the bikes at home and pivoted to delivery services. That became a game-changer for Yulu, which today boasts of 45,000 electric bikes across India, and most of them are deployed in the quick commerce segment. “We started seeing a V-curve, and from almost zero revenue, we reached pre-Covid-19 numbers within three months,” says Tewari.

But then they came up against another hurdle: a cash crunch. In late 2019, Yulu secured $8 million (about Rs 52 crore) in funding from institutional investors like 3One4 Capital and Blume Ventures and corporate investors like Bajaj Auto. But after the pandemic hit, that capital evaporated quickly, recalls Gupta.

“So, while we were doing well, there wasn’t enough money to buy more bikes. Venture capitalists were saying the world had changed, and the business didn’t look lucrative anymore,” adds Tewari. But there wasn’t enough evidence yet for investors to commit.

Things started looking up in June 2020 when Yulu managed to raise an additional $2.5 million (about Rs 16 crore). The firm’s fortunes began to improve, and in 2021, Bajaj Auto, an early backer, stepped in with what proved to be a game-changing offer.

At that time, 70% of Yulu’s bike components were imported, mostly from China. Bajaj gave Yulu two choices: continue with the Chinese model or start afresh with a fully Indian-made product, designed by Bajaj. Over time, Bajaj has reinforced its faith in Yulu by increasing its stake, which stands around 19% at present.

Bajaj’s pact with Yulu marked a big difference as the vehicles were designed keeping in view Indian roads and now, the delivery model. “In the earlier versions of the Dex bike, there was no rear carrier, no taillight, and the product had several structural issues, which we have since addressed,” explains Gupta.

Yulu’s focus on growth has helped it increase its revenue. It almost tripled from Rs 46.58 crore in FY23 to Rs 122.79 crore in FY24. However, with an increase in investment, losses too rose from Rs 94.88 crore in FY23 to Rs 142.83 crore in FY24.

Increasing Fleet

Yulu’s fleet is expanding rapidly, driven by the surging demand for quick deliveries. Gupta reveals that the company is in early discussions to develop a specialised bike tailored for food delivery riders. “We aim to reach 100,000 bikes by September 2025,” says Gupta, noting that 45–50% of this fleet will cater to quick commerce, with the rest supporting food deliveries and other use cases.

To fuel this growth, the company is considering a Series C funding round. However, Tewari mentions that their financial reserves are currently stable, and debt funding might be an option in the near future. In January 2024, Yulu secured Rs 25 crore in debt from Chennai-based NBFC Northern Arc Capital.

Yulu now boasts a fleet of 45,000 bikes across 12 cities, with more to follow. Though not a like-for-like comparison, electric bike rental company Zypp has revealed that it has 22,000 two-wheelers.

Safety First

The increase in Yulu’s fleet has brought with it some concerns over safety. Electric bikes fall under the low-speed category and don’t require a licence or helmet by law. But Yulu has made safety a top priority. “We encourage our riders to wear helmets, and we even offer them the option to purchase helmets directly from us,” Gupta notes. Additionally, the bikes have lower speed, which ensures the riders are always in control, Gupta adds. The company’s smart electric vehicles (EVs) use Internet of Things (IoT) technology to communicate real-time data from the vehicle and battery to Yulu’s servers.

Gupta says a Yulu rider who commits a lane violation is first notified of the offence through the app at the end of their ride. They are also asked to refrain from such behaviour in the future. “In cases of repeated non-compliance, the rider may face financial penalties, and in extreme cases, may even be barred from using our platform,” Gupta says.

Yulu works with city governments and municipal authorities to launch fully integrated mobility solutions, says Pranav Pai, Founding Partner and Chief Investment Officer at 3one4 Capital, an early backers of Yulu. “This has meant that they launch on day one as a fully integrated and regulated solution that is part of the multi-modal transportation network of every city. This is a unique approach in mobility globally, since most global mobility companies usually launch without government consultation and operate in the ‘launch first, seek permission later’ mindset,” he adds.

With its revenues growing and Ebitda turning positive, the question on most analysts’ minds is when Yulu will go public. Tewari says the company wants to achieve full profitability first before thinking of an IPO in a couple of years.

With its presence expanding, and its safety gear in place, Yulu may see fewer bumps ahead.

@PalakAgarwal64