Black-owned e-scooter company in Detroit was inspired by bloody crash scene |
There are now six brands of e-scooter rental cars roaming the sidewalks and streets of Detroit, up from none four years ago.
All but one are stand-up scooters. For the casual driver, these brands are more or less interchangeable, apart from different color schemes, logos and smartphone apps for downloading and constant updating.
The other company, Boaz Bikes, is unique in both its design and the backstory of its founder. Most noticeably, it’s the only e-scooter in town with a seat for a driver and a basket to carry things. The company says its seat scooters are safer than regular scooters and accessible to more potential riders.
Boaz is also one of the few black-owned e-scooter companies in the country and one of only two to be headquartered in Detroit rather than on the west or east coasts. The other Detroit company, C-Max Scooters, has only used 20 of its stand-up scooters downtown but is hoping to double that number soon.
Boaz founder and CEO Emil Nnani, 32, who grew up in Raleigh, North Carolina, has gone through one of the most unique avenues to becoming an e-scooter business founder.
He’s a former Bloods Gang member who, after serving in juvenile prison for robbery, found a Christian and became a Christian hip-hop artist named E-Fetti.
Before starting Boaz, Nnani had a Christian clothing store, which he eventually sold, and an on-demand errands start-up based in Dallas, where he lives with his wife and family when he is not in Detroit.
As of COVID-19, Detroit has been the only city where Boaz’s 400 scooter fleet operates. However, the company plans to be based in Los Angeles later this fall and then expand to other cities over the next year if and when it can attract more investment.
Last year, Boaz pulled out of Plano, Texas, as well as Atlanta, where all e-scooters were declared non-essential businesses at the start of the pandemic. The company then doubled on Detroit after the first wave of COVID-19 subsided.
“In Detroit, we were considered an essential business,” said Nnani. “People had to get around.”
Nnani’s idea for Boaz came after witnessing a nasty e-scooter crash in Dallas in 2018 that involved a young person and a sidewalk. He remembers seeing blood everywhere and leaving the injured driver in the ambulance.
“I thought, man, how unsafe these scooters are and life would be different for that person,” said Nnani. “I started doing research and saw articles everywhere about accidents involving Bird and Lime scooters. I thought to myself, OK, I can do something safer.”
Boaz is a biblical reference and the result of a brainstorming session on the perfect four-letter name for a new mobility startup.
“You have the Ubers, the Lyfts, the Birds, and the Limes – each has a four-letter word,” he said. “And since I’m a believer, Boaz is a biblical character. He was married to a lady named Ruth and he was strong and he was rich. And so I said, ‘I run with Boaz.’ “
Still, e-scooter company Boaz is still an underdog when compared to the big nationwide e-scooter companies like Bird and Lime and Ford’s own Spin.
Bird and Lime have raised hundreds of millions in venture capital, which has given them the ability to quickly operate in dozens of cities across the country and internationally. They continue to burn large amounts of cash by focusing on growth, not profitability.
This approach has never been an option for Boas. After helping to develop and build an early Boaz seat scooter and prototype app with China-based partners he knew from his previous ventures in late 2018, Nnani recalled visiting San Francisco in hopes of venture capitalists to meet and get investments.
However, since he lacked connections to Silicon Valley, he was received indifferently.
“It’s really just a relationship model and it’s all about who you know,” said Nnani. “If you are not in this network, if you did not go to this school, if you do not know the connections of the graduates of this school – I was completely outside of this circle.”
He became desperate and at one point tried to impersonate an UberEats vendor to sneak past building security and hand his boaz pitch to a venture capitalist. The trick almost worked, he said, until he was obstructed by a card reader in the elevator to the venture capitalist’s office.
Nnani returned home from this trip empty-handed.
“If we had this VC support, we would probably be in 50 cities by now, I don’t know,” he said.
He later managed to raise about $ 350,000 from friends, family, and acquaintances, which was enough to order his first batch of 500 Boaz scooters from China in 2019. He soon deployed these scooters in three cities: Detroit, Atlanta, and Plano, Texas.
Until then, Nnani had never visited Detroit before. He started out in Motor City at the suggestion of an early Boaz investor, Travis Wilder, who lives in metropolitan Detroit and owns the Christian clothing lines God Got Me and Spiritual Sports Socks.
Wilder had followed Nnani on social media and watched the growth of Nnani’s former clothing company, Christ Lyke Clothing.
“He had a Christian clothing line, and I have a Christian clothing line too. So I was really fascinated by him and we both shared similar views about our religious backgrounds,” said Wilder.
Wilder wasn’t surprised to learn of Nnani’s efforts to attract the attention of venture capitalists.
“Often in life it’s not what you know, but who you know,” said Wilder. “So if you don’t have some of these relationships it can be difficult to get VCs to look your way.”
Nnani twice applied for an investment opportunity on the popular ABC television show “Shark Tank”. His 2020 pitch was initially accepted, he said, but was ultimately dismissed based on the show’s rules regarding previous criminal convictions.
A Shark Tank representative did not respond to a message asking for comment.
Boaz was operating in its first three cities and planning to expand into Dallas when the pandemic broke out in March 2020.
“So we stopped everything and left all cities,” said Nnani. “We just sit there for a couple of months and I think about what to do next and what’s the crux of the matter. And that’s when I decided to double up on Detroit.”
Boaz scooters reappeared on the streets of Detroit in June 2020, this time in greater numbers, and passenger numbers rose.
A Boaz ride starts out at $ 1, then 33 cents per minute. Surveys show that around 80% of boas trips are made for fun, and around 15% for transportation to work.
In an interview last week at Boaz’s warehouse and repair shop in the Russell Industrial Center, Nnani stated that the company now does more business in Detroit than any other e-scooter brands here.
When asked why he was so sure, Nnani laughed and said he was not allowed to reveal his sources.
“Let’s say it’s an assumption because we don’t know what Lime is doing,” he said. “But we know we can beat Bird and Spin.”
Spin and Lime officials refused to comment on Boaz’s claim and Bird did not respond.
To expand its fleet of scooters, Boaz launched a crowdfunding campaign in late 2020 that raised around $ 1.2 million from 4,000 investors. The company also raised another $ 700,000 from general investors, he said, and the latest valuation was $ 35 million.
No blitzscaling for Boaz
E-scooter leaders Bird and Lime have burned investors’ stacks of money to expand at all costs a business strategy known in Silicon Valley as “lightning scaling”. To date, Bird is still not profitable, and Lime has only reported a quarter that it is not in the red.
Boas, on the other hand, never had the opportunity to make massive losses for the sake of rapid expansion.
Nnani said the company’s operations are currently profitable. One reason is Boaz’s monthly loss rate of scooters, which is roughly 2% below the industry’s 5% to 10% rate, he said. He attributed the lower rate to the longevity of the seat scooter design and the great attention his employees paid to the health of the Boaz fleet.
“We still have some vehicles from 2019,” he said. “We’re so small, we have no choice but to look at everything – we can’t afford to lose a vehicle.”
Nnani said Boaz is saving money by employing an in-house staff of approximately nine to handle scooter calls, battery charges and repairs. Other companies like Bird hire gig staff as “fleet managers,” which Nnani says can be expensive due to the significant revenue sharing.
“It’s a terrible model, but it works for them because they don’t care about making money, they care about expansion and growth,” he said.
Investors have been warming to Boaz lately, and Nnani said the company is trying to get through a Series A funding round with venture capitalists again in the coming months, likely to raise between $ 10 million and $ 20 million, to raise about 10,000 more Build scooters and expand beyond Detroit and Los Angeles.
“We will start talks here in November and December and open the round in January and we hope it will end within 30 days of the round opening,” he said.
Scooter ride SPAC
The scooter deployment in LA, which is planned for the fall of this year, will be financed by crowdfunding from Boaz. Those who participated in the crowdfund can see future paydays under several possible scenarios, such as a series B round that buys out previous investors, a takeover of Boaz, or an IPO of the company.
Bird is preparing to go public on the New York Stock Exchange through a blank check company known as SPAC, with a potential valuation of over $ 2 billion. Lime also tried to go public through a SPAC, according to news reports, but ran into difficulties and that plan stalled.
In the near future, Boaz plans to introduce its first stand-up scooter, which has three wheels and a deck that resembles a wide skateboard. Nnani insisted the devices are safer than traditional stand-up scooters and that the first 25 will be deployed around Wayne State University later this year.
Further out, Boaz could envision a two-seat scooter for which it recently filed a patent.
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