Zūm, a startup that provides optimized transportation services for school-age children, has announced the close of a $130 million Series D raise, bringing its total funding to more than $200 million. The company intends to use the funds to add 10,000 new electric buses, vans and cars to its platform with the end goal of achieving 100% EVs by 2025. Currently, the company's fleet has 1,000 vehicles, and they're mainly all internal combustion engine vehicles.
In anticipation of having a large number of batteries parked during off-peak hours, Zūm recently partnered with AutoGrid, which provides energy management and distribution software, to transform its fleet into a giant virtual power plant that gives energy back to the grid.
The Series D funding, which is led by Softbank Vision Fund 2 with participation from existing investors including Sequoia, BMW i Ventures and AngelPad, comes just a few months after Zūm was awarded a $150 million contract to modernize the San Francisco Unified School District (SFUSD) transportation service. Zūm also hopes to use the capital to further expand into new markets and districts, according to the company.
School transportation hasn't changed much in the last century, despite the fact that it's often referred to as the nation's largest mass transit system. More than 26 million children in the U.S. ride the bus every day, and it's likely still an outdated yellow bus that coughs out diesel fuel as it travels on inefficient, untracked routes. Zūm's service aims to bring that system to 2021 and beyond by distributing buses, vans and cars around school districts in ways that save transit time and address students with special needs, as well as using its advanced fleet management program to optimize logistics.
"We started out as a company for parents to directly schedule rides for their kids, yet we knew there was an opportunity to build on our success and expand our services to the entire system," CEO and co-founder Ritu Narayan said in a statement. "Today, we are taking a huge step forward in solving the systemic issues that have plagued school transportation. We’re modernizing the entire system because we believe schools, parents, kids and drivers all deserve better."
Transportation is one of a school district's biggest costs. By correcting inefficiencies like circuitous routes and rigid schedules, Zūm has been able to save school districts like SFUSD $3 million per year on average, according to the company. It has already worked with 4,000 schools throughout California, Seattle, Chicago and Dallas, and is planning to expand its service to 12 states over the coming years, including Arizona, Florida, Virginia, Oregon and New York, with an eye on Washington, D.C., as its next target.
“Using data and technology, we believe Zūm is modernizing school transportation by offering better services, efficiency and sustainability — while increasing safety for children,” Andrew Straub, investment director at Softbank Investment Advisers, said in a statement. “We are impressed with the immediate impact that Zūm has made for school districts who have deployed its service across their entire network of schools over the past year, including significant cost savings.”