EVmo Inc (OTCMKTS:YAYO), a provider of vehicles to the rideshare and delivery gig economy sector, announced that it closed $15 million in debt financing with New York based Energy Impact Partners (EIP).
The Los Angeles-based company said the financing is a “significant step” towards a 10,000 car and van expansion over the next 18-24 months. The firm added that the expansion is aimed at its existing seven North American markets, and beyond.
EVmo noted that it plans to add electric vehicles (EVs) to its platform, taking the overall fleet composition of EVs to more than 20%.
READ: EVmo Inc hits record yearly revenue in 2020 results; plans to make 2021 the year of the electric vehicle
"We believe that our strategic alliance with Energy Impact Partners will facilitate EVmo’s growth across major US markets. As many as 500 fleet units will be added to our platform and deployed immediately, including the addition of more EVs, improving our EV car mix to 20%, with the objective to ultimately be a fully EV company. With further financing we will endeavor to deploy 10,000 vehicles over an 18-24 month period,” EVmo CEO Stephen Sanchez said in a statement.
At the margin, every $10 million in debt and or equity capital raised should enable the company to purchase around 4,000 vehicles with an 85% to 15% car to van mix. “This should translate to approximately $80 million in annual revenue for every $10 million of capital raised at the margin,” said the company.
EVmo added that it anticipates scaling to 25% EBITDA, or earnings before interest, taxes, depreciation, and amortization margin.
Meanwhile, EVmo Board Chairman Terren Peizer noted that the financing is “truly remarkable” as it was accomplished in the absence of an equity capital raise.
“We have continually said that we will lean on debt and other non-dilutive financing in addition to equity capital. This is a high EBITDA model that supports debt financing that we believe will create proportionately greater returns to shareholders,” added Peizer.
ThinkEquity, a division of Fordham Financial Management Inc, acted as placement agent for this debt financing.
"As part of Energy Impact Partners focus on mobility being an instrumental sector leading the energy transition, we are excited to announce our investment and partnership with EVmo,” said Harry Giovani, who is the CEO and Managing Partner of EIP Credit Strategies. “Through our financing, CEO Stephen Sanchez together with the EVmo team will be able to further scale the company’s electric fleet – providing an essential and transformational product to the electric gig-economy.”
EVmo rents vehicles to customers who are participating in the gig economy. This includes ridesharing, carsharing and e-commerce platforms. The type of vehicles on the company's platform ranges from electric passenger vehicles to well-equipped cargo vans that are used by e-commerce delivery providers.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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