Volvo Cars has acquired a stake in Zūm, a fast-growing on-demand ride sharing service for children, via the Volvo Cars Tech Fund, its venture capital investment arm.
Zūm, a California-based company, was founded in 2015 and provides a trusted network of vetted drivers that allows parents and schools to schedule transport for school commutes, after-school events and other activities. It also provides the option of adding child care before or after a ride as needed. By doing so it helps busy parents solve the daily life puzzle in a safe and trusted way.
Drivers are vetted through a strict three-step process. They need to be able to prove they have a clean driving record and previous child care experience. Each driver is also subjected to a driving test and multiple background checks. Finally, each driver needs to present their car and pass a thorough 22-point vehicle inspection.
Zūm applies advanced routing algorithms and machine learning to create the most efficient routes possible and to match drivers with rides. A mobile app and online dashboard allow both parents and schools to follow and track their kids’ journeys in real-time as they are being driven.
Because of the predictable nature of the business as well as Zūm’s lean and efficient business model based on smart algorithms and machine learning technology, it is a credible competitor to existing school bus operators and increases choice for parents and school districts.
Zūm currently has thousands of certified drivers in the San Francisco Bay Area, Los Angeles and other urban areas in California that together serve 80 per cent of the state’s population. Volvo Cars’ investment comes as a part of a funding round by Zūm, with which it aims to expand its business into other US states and continue developing its technology.
The customer group targeted by Zūm, families with children, significantly overlaps with Volvo Cars’ own customer base. While no decisions have been taken, Volvo Cars sees a potential for collaboration with Zūm. Possible areas of collaboration include adding Zūm to the digital consumer services offered as part of its Care by Volvo premium subscription service, as well as the deployment of Volvos as part of Zūm’s fleet.
“Parents lead busy lives and we all understand the challenge of solving the daily life puzzle,” says Zaki Fasihuddin, CEO of the Volvo Cars Tech Fund. “So we like what we see in Zūm: they offer a trusted and safe service that gives parents comfort that their kids are in good hands. Add to that their innovative technology, and it is easy to see why they are a good fit for our portfolio of investments.”
The Volvo Cars Tech Fund was launched last year and aims to invest in high-potential technology start-ups around the globe. It focuses its investments on strategic technology trends transforming the auto industry, such as artificial intelligence, electrification, autonomous driving and digital mobility services.
Last year, the Volvo Cars Tech Fund announced its first investment - in Luminar Technologies, a leading start-up in the development of advanced sensor technology for use in autonomous vehicles, with whom Volvo Cars collaborates on the development of LiDAR sensing technology.
Since that first investment, the Tech Fund has also invested in electric car charging firm Freewire as well as in Forciot, a Finnish firm that develops connected, printable and stretchable electronics.
Companies benefit from participation by the Volvo Cars Tech Fund as they may gain the ability to validate technologies, accelerate market introduction, as well as potentially access Volvo Cars’ global network and unique position in the Chinese car market.
Volvo Car Group in 2018
For the 2018 financial year, Volvo Car Group recorded an operating profit of 14,185 MSEK (14,061 MSEK in 2017). Revenue over the period amounted to 252,653 MSEK (208,646 MSEK). For the full year 2018, global sales reached a record 642,253 (571,577) cars, an increase of 12.4 per cent versus 2017. The results underline the comprehensive transformation of Volvo Cars’ finances and operations in recent years, positioning the company for its next growth phase.
About Volvo Car Group
Volvo has been in operation since 1927. Today, Volvo Cars is one of the most well-known and respected car brands in the world with sales of 642,253 cars in 2018 in about 100 countries. Volvo Cars has been under the ownership of the Zhejiang Geely Holding (Geely Holding) of China since 2010. It formed part of the Swedish Volvo Group until 1999, when the company was bought by Ford Motor Company of the US. In 2010, Volvo Cars was acquired by Geely Holding.
In 2018, Volvo Cars employed on average approximately 43,000 (39,500) full-time employees. Volvo Cars head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars head office for China is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China) and body components in Olofström (Sweden).