Kyte wants to lay the groundwork for autonomous rental car delivery – TechCrunch

Kyte, a fleet logistics platform that allows customers to order rental cars delivered right to their door, has raised a $ 30 million Series A round. In the short term, the startup wants to expand into new cities, countries and verticals, but the long term goal is to create a platform capable of delivering vehicles via teleoperation or an autonomous system.

“We need the basis of a fleet operating system and a technological layer capable of managing both the fleet now as well as a fleet of remotely operated vehicles or autonomous vehicles in the future,” said Kyte co-founder Nikolaus Volk told TechCrunch. . “Part of that is really building the data platform that includes sensing and telematics capabilities, and really supports remotely operated launches in the future.”

To be clear, Kyte is not working on the software or hardware that will allow the delivery of remotely operated or self-driving cars – there are already a lot of companies doing this, and Kyte says it’s in advanced conversations with multiple companies. in space in order to join forces on pilot deployments. Rather, he wants to ensure that his fleet management system can connect and activate future technologies. Kyte plans to start testing remote delivery in 2022 and bring a small subset of the fleet to one or two markets by 2023.

But first, the company needs to build the business use case, drive the unit economy, and improve the customer experience for rental car deliveries before moving on to the “sexy” part of the business. business model.

Currently, Kyte operates in nine US cities, including Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle and Washington, DC. In early October, the startup expanded beyond Manhattan and into Brooklyn.

Kyte is positioned as the solution for all urban journeys longer than a general race. About 80% of its trips instantly leave the city environment for a few days. Long weekends are therefore Kyte’s daily bread. But as the company plans to expand to more cities and, by next year, more countries, it also looks to expand its use cases.

Ludwig Schoenack, one of Kyte’s three co-founders, told TechCrunch that the startup was pursuing a business travel vertical, in which customers arriving in a new city could arrange for their rental car to have them. meet at their Airbnb or hotel. Kyte also doubles on longer term rentals, or rather subscriptions up to 12 months.

The car subscription model is quickly emerging in many markets and in a few cases, such as UK-based Onto, it is about providing alternative access to electric vehicles.. Schoenack and Volk say that because they are very customer-centric, their primary focus is not necessarily to drive adoption of electric vehicles, but rather to listen to what the customer needs. While the majority of Kyte users are Americans taking weekend trips out of town, it stands to reason that scope anxiety, justified or not, is something the company needs to keep in mind. spirit.

Another potential barrier to introducing more EVs to the platform is the limited supply of electric vehicles. Kyte says it does not yet offer electrics in most of its markets, although almost all of them have a version of a hybrid car.

“We see our platform as the most ready to adapt to changing customer needs,” said Shoenack.

Kyte’s fleet is somewhat limited to the cars its partners stock. The company generally works with rental companies or companies with large commercial fleets that are underutilized and gives them a second life on its platform. Kyte is also starting to work more directly with manufacturers, both leasing and buying cars through a leasing company it controls.

All Kyte vehicles, third-party and leased or purchased from OEMs, live on the company’s ‘cloud parking infrastructure’, which are essentially dark shops for rental cars – cheap real estate tucked away in urban environments optimized for delivery operations. . Right now, Kyte has about one dark parking lot per city, with the exception of big cities like NYC and LA, where Kyte has multiple parking lots.

“It’s a more scalable model compared to any other because there will always be some hidden space from the consumer,” Shoenack said.

The lots also don’t have a storefront or branding, which makes it a pure delivery game that “allows us to arbitrate costs,” Shoenack continued.

Because the Kyte model saves on overhead, the startup claims it is able to offer cheaper services than ZipCars and Hertz in the world, resulting in profitable market operations.

“We cannot disclose the exact income, but we can share that Kyte has a seven-figure monthly income, and that figure has increased about 10 times over the past year,” Volk said.

Heavy investments in its technology, product development and accelerated growth have led the company to raise additional funds in this cycle.

The latest funding round, which follows a $ 9 million start-up round earlier this year, brings Kyte’s total funding to over $ 40 million. Series A was led by Park West Asset Management and Sterling Road.

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