Shared micromobility company Luup has raised $8 million (1 billion yen) in debt and asset financing to meet the growing demands of Japan’s micromobility market, which according to a recent report, is projected to reach $11.6 billion in 2030, up from $39.4 million in 2020.
Luup will use the proceeds to expand its service to cities across the country, targeting both large and small touristic cities as international travel begins to pick back up, according to CEO Daiki Okai. Okai would not specify which cities Luup hopes to expand to, but he did say the company would more than double its fleet size within the next month.
Founded in 2018, Luup rolled out its fleet of shared e-scooters in April 2021 and shared e-bikes in May 2020. Okai told TC that it had more than 2,000 e-scooters and e-bikes in total as of February 2022, a number that should reach about 5,000 by mid-May.
Currently, the company services Tokyo, Osaka, Kyoto and Yokohama, and it uses a slightly different business model to other shared micromobility players internationally.
Luup’s vehicles are dockless, but they’re not free-floating. It’s illegal to park vehicles just anywhere in Japan, so like other micromobility companies, Luup relies on a system of ports, which are delegated parking spots for the startup’s vehicles. Luup’s app lets riders check the available ports in real-time to reserve an available port.
The company has a total of 1,100 ports in Japan, but would not share how many ports it is aiming to line up for itself in the coming months. Securing those spaces represents a unique kind of land grab for micromobility companies in Japan.
“Given the social and regulatory constraints, it is impossible to operate e-scooter sharing in a dockless model in Japan,” said Okai. “You would have to have a certain number of ports in town to start the business. Available land is limited, and we are in full effort to secure as much land as possible now.”
Japan is working on easing e-scooter regulations. Currently, e-scooter riders are required to carry a driver’s license and restrict the maximum speed to 15kph. In March, a bill amendment to the Road Traffic Act was submitted to Japan’s parliament, the National Diet, to allow e-scooter users to ride at a maximum top speed of 20 kilometers per hour without a license, Okai said.
Luup competes with global and local micro-mobility startups like mobby ride, Lime, EXx, Bird Rides Japan, and Hasegawa Kogyo.
The startup’s latest funding comes eight months after the company raised a $16 million Series C equity round.
The new capital, which brings Luup’s total funding to approximately $37 million (4.6 billion yen), was led by Japan Finance Corporation, a Japanese government-backed financial institution, Mitsubishi HC Capital, and Sumitomo Mitsui Finance Leasing.