Zoomo axes 16pc of staff months after raising $120m-plus from Mike Cannon-Brookes and Scott Farquhar

The Australian start-up that supplies Uber riders with e-bikes has laid off dozens of workers, after raising more than $120m from Mike Cannon-Brookes and Scott Farquhar.

An Australian start-up which rose to fame by supplying gig economy workers with a subscription-based e-bicycle service has axed 16 per cent of its staff, just months after it poached high-profile executives from US rideshare giants Uber and Lyft.

Zoomo chief executive Mina Nada announced the lay-offs in a letter to staff delivered on Tuesday, in which he blamed the economy as the reason for laying off staff.

The cuts are thought to impact around 65 of the company’s workers.

“A year ago, we could not keep up with demand, supply chain was snarled and capital was abundant. We made decisions in line with our environment,” Mr Nada wrote.

“Fast forward to today, and we’re witnessing an increasingly challenging macro-economic environment with increased risks of softened demand and tighter capital. That requires an adjustment in our strategy and cost-base.”

Mr Nada said Zoomo would hit the brakes on its global expansion plans and shifted its focus toward becoming profitable. No department was left unscathed by the lay-offs, he said.

“Every department in the business has been affected as we reduce roles that no longer align with a more focused business strategy and accelerate our pace towards achieving profitability,” he said. “We will also deprioritise our operating footprint in select cities and pause select projects.”

Zoomo’s target market is largely gig-economy workers. The business model is one of several targeting riders who deliver food and parcels for the likes of Uber, Doordash, Deliveroo, Easi and Menulog.

The start-up, backed financially by Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar, provides e-bike delivery fleets to most of the major players in the food and grocery delivery segment. The Sydney-based company offers its e-bikes as part of a weekly subscription to gig workers, including servicing and support, and also offers fleet management software to enterprise customers. It boomed during the pandemic amid bumper demand for food deliveries.

Earlier this year as reported by The Australian, former Lyft vice president Jules Flynn returned to Australia to join Zoomo as the company’s Chief Operations Officer, a role which saw him oversee expansion into several countries. Meanwhile, former Uber executive Alan Well joined the company after a stint at General Motors in the autonomous vehicle division. Michelle Crocker, a former Bain consultant, was made VP of people and culture around the same time.

Holly Ledlin, Michaela Piggott and Jeremy Gallegos ride Zoomo bikes. Picture: John Feder/The Australian

All roles were decided following a Series B raise in the first quarter of this year, which saw Zoomo bring in $US80m ($122m). In 2021, Zoomo raised $12m in a round led by Australian venture capital firm AirTree with participation from Mr Cannon-Brookes and Mr Farquhar.

Zoomo isn’t alone in laying off staff, with several Australian companies announcing staff cuts of near 20 per cent in recent months.

In August, start-up darling Mr Yum, which rose to fame with QR-code menus, laid off 17 per cent staff after its founder Kim Teo admitted “we completely accept and own that we increased our headcount too quickly”.

“We made an assumption that the strong economic environment would continue deeper into 2022; instead, conditions deteriorated rapidly in May … And capital markets have remained soft since,” she wrote in a letter to staff.

LinkTree, a Sydney and Melbourne-based social media start-up, laid off 17 per cent of staff just weeks earlier. The business, which was valued at $1.78bn around the same time, was one of the top 300 most popular websites globally with 1.2 billion monthly views.

“The opportunity for Linktree is immense and I have no doubt we’ll achieve everything we intend to and more for our creators. The right path is rarely the easy path. Today’s change to our team is the hard path, but it puts us in a strong position to deliver on the opportunity we have in front of us,” wrote Linktree CEO Alex Zaccaria on LinkedIn at the time.

Zoomo declined an interview with The Australian.