E-bike start-up Zoomo cuts jobs in second round of lay-offs

E-bike start-up Zoomo, which supplied collapsed rapid grocery delivery platform Milkrun, has executed a second round of lay-offs, six months after slashing its global workforce by 16 per cent.

Zoomo, which provides electric scooters and e-bikes to the grocery and delivery sector and counts UberEats, Domino’s and DHL as customers, confirmed it had cut 27 jobs in the latest redundancy round.

“Zoomo has made the difficult decision to reduce its overall head count by 8 per cent. The restructure will accelerate our path to company-wide profitability in 2024,” the company said in a statement.

“It primarily affects employees in our corporate head office, as we bring central overheads in line with regional profit.”

The collapse of companies such as Milkrun has proved a canary in the coal mine for start-ups because their business model depended on regular injections of investment, which was possible when interest rates were near zero, to sustain large losses.

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Zoomo was founded in 2017 by former Deliveroo executives Mina Nada and Michael Johnson, who set the company up as a provider of electric bikes for last-mile delivery businesses. The company now operates in about 16 cities across Australia, North America and Europe.

Unlike a regular bike retailer, Zoomo pitched itself as a subscription service for companies or delivery riders that would also maintain fleets of e-bikes. But it faces competition from cheap e-bikes directly imported from manufacturers in Asia, that are popular among cost-conscious gig economy workers.

The company has raised a total of $US116 million (A$174.8 million), which includes $US15.9 million ($24 million) from existing investors in a raising earlier this year led by Atlassian co-founder Mike Cannon Brookes’ Grok Ventures and Clean Energy Finance Corporation (CEFC).