The “Tesla of E-Scooters” INOKIM aims to file for a public offering in Tel Aviv. We interview Kfir Ben Shooshan to learn more.
They seemed like child’s play at first: small, electric and stand-on scooters. But if you’ve ever experienced a New York minute, consider that Tel Aviv is about twice as fast. And getting around the city at a breakneck pace needs to match the Israeli tempo. Today electric scooters are virtually everywhere and the public’s love for them shows how quickly Israeli urbanites adapt. No-one’s life has been the same since they started rolling around en masse about 5 years ago.
The latest player in the global market is an Israeli company called INOKIM that not only gives commuters the ability to solve the last mile problem by letting them own an affordable e-scooter –– but INOKIM is taking care of their own supply chain resources by investing in their own manufacturing facilities in China. After an anticipated initial public offering on the Tel Aviv Stock Exchange (TASE) this fall INOKIM plans on making a strategic move to expand swiftly into the UK, Europe and American markets.
You can buy their e-scooters online, at a retail store in major cities, and you might even see them for use at a favorite hotel you book in the near future.
The global electric scooters market size was estimated at USD 19.4 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 7.6%. Cities with moderate climates like LA and college campuses everywhere are a target for the largest players.
We speak with Kfir Ben-Shooshan, founder and CEO of INOKIM to learn more about e-mobility and what it means for cities, business, and prospective investors.
Green Prophet: With so many global players in the market, what edge do you think your scooters can pass on to consumers as well investors?
Kfir Ben-Shooshan: Inokim has been a pioneer in the e-scooter space for more than a decade. We were the first to incorporate a brushless electric motor into the wheel. This makes our e-scooters smaller and lighter, creating a much better riding experience over longer distances. The rest of the industry has –– over time –– copied our design. This has always been INOKIM’s edge over the competition. INOKIM leads in innovative design and owns our entire manufacturing and sales channels, which enables us to quickly incorporate the latest technologies into our products and also gives us an edge on the service side.
By having multiple point-of-sales and service locations in each market means that INOKIM is able to provide better service to our customers. Post-sales service is a key differentiator for INOKIM and this one of the reasons why we have the highest market share worldwide.
Tell us about your decision to merge your business units. How important is supply chain in this business?
INOKIM is the only e-scooter company that owns its entire value-chain from R&D to manufacturing to distribution and sales. Having control over R&D, manufacturing and distribution allows INOKIM to adhere to the highest build-quality and be the first to market with the newest technologies. Most competitors outsource their manufacturing, which may save some money, but it means that they have no control over quality. The difference in quality is the first apparent difference a customer sees when comparing INOKIM to the alternatives. This is the reason that INOKIM is considered a premium brand, the “Tesla of e-scooters”.
I am curious about insurance in the business. Why hasn’t an entrepreneur from Israel developed insurance for e-scooters and bikes? Switzerland had bike insurance 20 years ago when I lived there and it was mandatory. Please discuss.
We have held several meetings with insurance companies worldwide, including some insurance-tech startups that offer unconventional policies. INOKIM is a strong proponent of rider and pedestrian safety and believes there needs to be a mechanism to guard against accidents. The whole industry is faced with the “chicken-and-egg” situation. If the industry starts selling or requiring insurance policies, then next a driver’s license may be required by the insurance companies, which would then require a driving test, which will mean more regulation and so on. This will hinder the growth of the market and limit the popularity of e-scooters.
Who is the typical e-scooter user in Tel Aviv, LA, or London? Are they the same kind of people? Tell us a bit more about them.
If you would have asked me this question three to five years ago, I would answer that the typical rider is a single, male, professional in the age range of 25 to 35. However, with the increased awareness and the rising popularity of e-scooters worldwide, we see many more women and an older ridership. Today, it is not uncommon to see a 65-year-old scootering throughout Tel Aviv. We find that the typical rider is similar in Tel Aviv, London and LA.
The main reason people use e-scooters is to avoid traffic, lower transportation costs and enjoy the open air. Of course, many of the riders are happy they are using green electric technology and never having a parking problem helps make the case for a scooter, but these are not the only reasons we have seen.
Who are your biggest competitors and what do you think you can do better? Or why would consumers choose to buy an INOKIM scooter rather than rent one they can find on the street?
Our biggest competitors are the China-based mass producers such as Xiaomi who have a well-known brand Segway, which was a name acquisition. They cater to the lower end of the market as their build quality is low and it retails in a multitude of stores that offer no servicing. The two main things INOKIM does better than the competition is that we sell a superior product and offer extensive post-sales service.
At first, when these mass-manufacturers entered the market, we were told that the scooter market will be commoditized as the price for e-scooters will fall drastically and we will no longer be profitable. The exact opposite happened. When customers buy a Xiaomi scooter, they quickly realize that they would like a better scooter for transportation – one with more power, longer range, real tires, disc brake, and a more solid build quality. This has helped INOKIM increase our sales tremendously as most of our first-time customers are former users of entry-level scooters, such as Xiaomi. Xiaomi’s entry into the market has actually solidified INOKIM’s status as a premium brand where customers are willing to pay a higher price for superior quality and service.
In addition, INOKIM owners can walk into any INOKIM store and will, in most cases, receive a free check-up and tune-up that includes tightening the relevant bolts. Our competitors’ customers do not have the same privilege and they usually need to return to the same store they bought their scooter at or find a local scooter retailer that can service their unit. We get a lot of our competitors’ customers bringing in their scooters into INOKIM stores asking for service.
As for e-scooter ride-sharing services, we are a big proponent of the industry. The increased prevalence in scooter ridesharing has helped INOKIM increase our sales. Ridesharing offers many advantages for casual riders, but is limited for riders that want to rely on a scooter as their go-to transportation vehicle. With ridesharing, vehicle availability is a big issue. Many times, there are no available scooters, the battery needs to be charged or the vehicle is not parked correctly, which can lead to vandalism. Another major issue is cost. Several studies have shown that in the long run, it is better to own a scooter for a daily commute rather than renting it every day, assuming that they are available.
Tell us a little about where consumers can find your scooters today.
INOKIM scooters are sold directly in INOKIM-branded stores, where a customer can test-ride any scooter before purchase. We recently opened a flagship store New York city and plan to open additional stores in Miami, London, Paris, Barcelona and Berlin by the end of next year.
We also sell directly online.
There is no doubt that e-scooters play an important role on reducing carbon emissions. Can you tell us about any special eco-initiatives you are a part of? Is this a consideration?
As mentioned previously, having control over our manufacturing enables us to efficiently introduce the latest technologies, including newer, greener technologies. We constantly strive to make our scooters lighter, stronger and with increased range in order to reduce the carbon footprint of our scooters.
We also continuously strive to improve our manufacturing, reducing cost and carbon footprint. The company aims to be carbon neutral by 2030.
Safety has always been on my mind, and I guess on the minds of people who share the walkway with e-scooters. Can you let us know about measures that can be taken to make our cities safer? Or what would you like to see from the “city” side on regulating or making spaces safe for e-scooters, pedestrians and cyclists?
INOKIM has always supported rider safety above all. We are glad to see more and more cities are building dedicated paths for bicycles and scooters. This is the best initiative any city can take which dramatically helps improve pedestrian and rider safety. Other measures, such as dedicated scooter parking areas, charge spots and street closures from cars and trucks, further contribute to increased rider and pedestrian safety.
Do you think there will be a self-driving e-scooter one day?
As with every other transportation vehicle, such as cars, we expect there to be a self-driving e-scooter in the not-so-distant future. In brain-storming sessions we held with riders, the main reason for a self-driving scooter was for safety while riding and parking issues. We expect that the initial self-driving e-scooters will be three-wheeled scooters, mainly for better balance. We do not expect to see riders sitting on a two-wheel e-scooter reading a book while the scooter drives for them as seen with some Tesla drivers.
Tell us more about why you are choosing to list on the TASE.
Tel Aviv, as many know, is a global hub for the Start-up Nation: Israel. In addition, there is a lot of available investment capital in Israel. Recently, the TASE has taken major steps to becoming a leading global stock exchange, on par with the best-known exchanges, such as NYSE, LSE and others, and has listed many world-leading companies. We know that being right down the street from INOKIM’s global head office, will help us better manage being a public company.
We have been planning for some time to raise an investment round to execute our global expansion plans. The market is hungry for green transportation companies, as seen with the many electric car companies’ high valuations, mostly notably, Tesla. INOKIM is a major player in the e-scooter market, which compliments the car industry, especially for the last mile transportation needs and sometimes even replacing the need for car ownership all together. So we have decided to raise funds in the stock market versus other fund-raising routes, such as venture capital or debt financing, similar to the many auto-tech companies currently listed. Unlike other IPOs, INOKIM is bringing an established, profitable, business to the stock market with revenues and global brand recognition.
What’s your biggest dream in terms of expansion plans?
In the long term, we believe INOKIM, will be sold in every country worldwide. Our dream is that in many metropolitan areas and city-countries, such as Singapore, INOKIM will be more prevalent than conventional cars. We believe that when people think of their transportation needs, the first image to pop in their head will be an INOKIM e-scooter.