Choose your capital partners carefully, Mevo founder says

The idea for car share company Mevo was born in after-work sessions between founder Erik Zydervelt and his mates over pizzas and beers, thinking how they could make the world a better place. 

Realising that, on average, cars sit around unused 96 percent of the time; they saw a gap for an alternative to private car ownership. Not long after, Zydervelt and his cofounders Finn Lawrence and Phil Burgess, launched the startup in Wellington in 2016 with three cars. 

Seven years later, Mevo has hundreds of cars, over 40,000 users, including business and corporate clients such as Beca, Meridian Energy, and government departments, and has since expanded to Auckland and Hamilton. 

The premise of the business is simple. Through the Mevo app, users have access to a network of vehicles they can reserve, unlock and drive away, whether for five minutes or five days. In line with its sustainability values, the company offsets 120 percent of all carbon produced during travel. 

The startup is undertaking a crowdfunding campaign for between $2.75 million to $4m of new capital on private equity marketplace Snowball Effect. The maximum equity offered equates to 11.42 percent of the company’s $11.3m valuation. 

Existing cornerstone investors have committed to $2.25m to the offer, and the company has already raised just shy of $5m in seed capital. If the full amount is raised, the founders’ stakes will be diluted to 27 percent, while Angel HQ’s stake will go to 7.88 percent. 

The capital will ‘strengthen’ Mevo’s balance sheet and fund growth, including a ‘national rollout’. The company wants to launch in 20 regional cities across New Zealand, with at least three cities targeted for 2024.

The startup predicts it will hit profitability from February 2025 with total revenue forecast to grow from $5.7m at the end of the 2024 financial year to $77.9m by 2028, representing a compound annual growth rate of 92 percent. 

Crowdfunding gives people a chance to get access to startups in a way that is “often, to be frank, squandered by a lot of the ecosystem,” says Zydervelt. 

The offer closes on February 18 next year.

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What do you wish you knew starting out that you only learned along the way? 

The thing that seems obvious, and yet so many of us ignore, is taking a really hard look at what you want to actually achieve and where that’s happening. 

If you want to build a billion-dollar company…..as special as you are, you want all the wind behind you as you can get, everything you can have set up for success. My next venture will be set up [in a place] where billion-dollar companies regularly start. 

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What did you learn from something that went wrong? 

You need to look for ‘runs on the board’ in all your partners – capital included. 

If a capital partner hasn’t delivered what you want to deliver and they tell you they are really excited about it, that’s nice, but you’re betting the next five years of your life. 

Whereas, if you're a capital provider you might be making a dozen bets, so if you get one wrong, it's not the end of the world. 

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Who have you worked with that’s been helpful for your success? 

There are loads of people with tons of great skills and experiences, and you should treasure them and take their advice. But with that, I would say find people who have already done what you are hoping to achieve. If you want to build a hundred-million-dollar company, go and find someone who has actually built a hundred-million-dollar company. No one else will have the experience you’re looking to get. 

I've been really lucky to have Linda Jenkinson as a coach for a couple of years now. Linda has built and sold a few businesses for [greater than] US$100m, including as the first women CEO/founder to list a company on the NASDAQ stock exchange with DMSC (Dispatch Management Services), the on-demand courier company she co-founded. As you can imagine she has seen a lot first-hand and is always there to help me chart our next steps.

Additionally, I am pleased to be welcoming Marcel van den Assum and Steve O'Connor to the Mevo board who have both delivered sizeable exits for New Zealand businesses.

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What was the best advice you received along the way?

Revenue is the best investment.

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What advice would you give to a startup founder? 

From the ecosystem, we’ve seen a lot of talk from New Zealand investors about supporting companies going internationally but very little action. As a matter of fact, they’re quite risk-averse. 

[As a founder], you really want to look at who is sending companies offshore in a meaningful way and who’s not. That should tell you a lot. 

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What was your first entrepreneurial moment? 

When I was growing up in Motueka and at high school in year 11, some friends and I planned the after-ball, which was a decent scale, in retrospect. We coordinated everything from flying DJs in, venue hire, transport, security, and everything to throw a great party and keep people safe. 

The event was completely independent from the school and coordinated with the regional youth council and youth division of the police to ensure we were doing what we needed to do, legally speaking. 

It worked out to be around a $25,000 budget that we personally took a risk on – basically all of our life savings pooled together. 

We coordinated a great local bookshop to sell the tickets for us, our posters came back from the printers, and we put them up around the school. That day, the principal got up at the assembly and forbade everyone at the school from attending. Naturally, we had sold out by 5 pm that afternoon. It was quite the party.

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Founder Feedback is a weekly series asking founders about their startup journeys. If you have a story to share, reach out to mary@caffeinedaily.co

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