- Swedish scooter startup Voi has taken drastic steps to ensure its survival as much of Europe locks down to battle COVID-19.
- The company has laid off and furloughed most of its staff in an attempt to manage the ongoing pandemic.
- "A few weeks ago we realized that we needed to change our strategy and take drastic measures," Voi cofounder and CEO Fredrik Hjelm told Business Insider in an interview. "Our executive management team has experience from previous crises and we made the decision to cut costs and preserve a cash runway into 2021."
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Swedish scooter startup Voi has taken drastic steps to ensure its survival as COVID-19 shuts down much of Europe.
The scooter company has laid off and furloughed most of its staff in an attempt to manage its cash amid the ongoing pandemic.
A warm winter and an $85 million fundraise in November 2019 should have put Voi in a strong position ahead of peak scooter season in summer, but COVID-19 lockdowns signal trouble for it and every other rival startup.
"A few weeks ago we released that we needed to change our strategy and take drastic measures," Voi cofounder and CEO Fredrik Hjelm told Business Insider in an interview.
"Our executive management team have experience from previous crises and we made the decision to cut costs and preserve a cash runway into 2021."
Much like other scooter startups, Voi works by unlocking an individual scooter through a phone app. How much you pay per ride depends on the city.
The company has expanded from its base in Stockholm to more than 38 cities in 10 European countries.
The company has advantages over its US rivals. Being rooted in Europe, the startup can take advantage of the more generous furlough schemes operated in each country, though some are more generous than others.
In France, for example, president Emmanuel Macron has promised unlimited budgetary support for companies and workers to avoid layoffs, at an estimated cost of €45 billion ($49 billion). He promised another €300 billion in state-guaranteed loans to support struggling companies.
As well as furloughs, Voi has laid off all staff still on probation, some senior management and a number of roles across finance, engineering, design, and commercial. The company has said it will aid those affected in finding new roles elsewhere — though with hiring freezes likely across much of tech, it isn't clear how practical this is.
Voi's senior management will also take undisclosed pay cuts.
The decision impacts around 100 staff at the startup, effectively the entire team. Hjelm said staff were informed of the decision one-to-one either in person or via video call.
"We are prepared for the worst," Hjelm added. "We're pessimistic that Europe could be partially locked down until the fall and capital markets, including venture capital and private equity, are nervous."
The CEO said he was not pressured by the firm's investors to lay off or furlough staff.
Coronavirus has devastated much of the transport and travel industries. Sweden is not yet fully locked down, with Voi still operating in some cities across the Nordics and offering free rides to key workers.
"We don't want to just survive and wait, we want to come back with full force and be offensive on the capital side," Hjelm said. "The ones who survive this will grab more market share than before this happened and there will be more M&A."
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