Los Angeles is glamour incarnate, but there's a lot of grit in the air-literally. Thousands of containers are moved off and on ships at the area's two major ports every day, almost always transferred via pollution-spewing diesel trucks. This has made Los Angeles a hotbed for all kinds of new electric vehicle and charging infrastructure projects.
A new startup called Nevoya is pouncing on the opportunity.
It's the best place in the country" for electric trucks, according to founder Sami Khan, who spoke with TechCrunch recently. "The incentives are the strongest," he said, "and there's just a huge market here.".
It appears that Nevoya is already picking up steam. A startup carrying loads on electric trucks in the LA region for Fortune 500 companies that Khan did not want to name. Nevoya also said that it had raised a seed round of $3 million led by Third Sphere and RedBlue Capital, with Necessary Ventures, Ciri Ventures, and Never Lift joining this fund.
Nevoya is establishing itself as the "first zero-emissions technology and trucking platform" in the U.S. The startup only buys electric trucks–all Freightliner eCascadias thus far–and sells to shippers looking to move goods cleanly. It's also using AI software to optimize usage, routing, and charging of its trucks, a factor that allows it to keep its prices lower than diesel.
Khan and his co-founders form a triumvirate of complementary expertise that seems fitting for such an endeavor. Khan spent a few years at McLaren Applied, the British automaker's innovation arm, but he also spent a half-decade working in private equity. John Verdon headed business development and commercial partnerships at Waymo. And then there's Tom Atwood, who built a predictive analytics startup that sold to supply chain company Project44, where he's spent the last couple years working on route optimization and infrastructure planning software.
The money will go to grow operations but not to buy trucks. Khan said those purchases will be made with debt a strategy that feels comfortable to him, given his background in private equity. It makes Nevoya much more investor-friendly in an environment where there's still a lot of hesitance around hard tech," Khan says. Of course, he said his team "kissed a lot of frogs," but that process led them to investors like RedBlue — which is run by the former founding partner of transportation startup fund Maniv Mobility, Olaf Sakkers.
They were people that we had a first conversation with and within a week it was at a term sheet, because they got it, and they understood," he said. "The size of the pie, and the opportunity, is so, so huge.".
It was tough competing on the cost side with diesel trucks, but that pressure is tempered in how easy it's been to start conversations with companies shipping goods through the LA area," says Khan.
"All of these Fortune 500 brands are looking to reduce their Scope 3 emissions (indirect emissions) and effectively have no solutions," he said. With Nevoya, the promise Khan makes to those companies is: "There is no difference to your business, because we take care of the charging. We have the drivers. We have the trucks."
Even as Nevoya is still working to get to cost parity with diesel, Khan said these big companies almost don't care. "They want to decarbonize so badly that they are willing to pay a premium, and so for those [customers], we are actually going out at a rate that is higher than diesel.".
What's exciting about building this business, of course, is that you are going to get through the door at any shipper in the United States, said Khan. We have not failed there once — as soon as you say you have electric vehicles, they pick up the phone. They escalate.
As it brings more and more companies into its fold, Nevoya's software effectively supercedes or piggybacks shipments from different customers to maximize the potential of the electric trucks in its fleet-that is just how it manages to cut costs.
Khan said Nevoya is currently hopping around different charging locations - this is another place where the optimization software will really have to shine - but eventually wants to build its own charging infrastructure. At that point, Khan said he could see Nevoya moving into smaller-class trucks, too.
Another promising growth avenue for Nevoya is geographic expansion within the United States. It is beginning that push with a market as different as can be from its home base: Texas.
But despite the many social and political differences, Khan sees Texas as similarly well-suited a state from which to drum up business. It may not have the pot-of-gold incentives like California, but Khan said Texas's looser regulatory framework and cheaper electricity put it on par with the financial modeling his team has done for operating in Nevoya's home state.