Los Angeles is known for glitz, but there’s also 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 […]
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Los Angeles is known for glitz, but there’s also 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, founder Sami Khan told TechCrunch in a recent interview. “The incentives are the strongest,” he remarked, “and there’s just a huge market here.”
It appears Nevoya is already making some headway. The startup’s carrying goods on electric trucks in the LA area for Fortune 500 companies that Khan declined to disclose. Nevoya also revealed to TechCrunch that it raised $3 million in a seed round led by Third Sphere and RedBlue Capital, with Necessary Ventures, Ciri Ventures, and Never Lift coming aboard as well.
Nevoya is billing itself as the “first zero-emissions technology and trucking platform” in the U.S. The startup is exclusively buying electric trucks — all Freightliner eCascadias, so far — to offer to shippers who want to move goods cleanly. It’s also using artificial intelligence software to optimize the usage, routing, and charging of its trucks, which Nevoya says allows it to keep its prices lower than diesel.
Khan and his co-founders make up a triumvirate of complementary expertise that seems appropriate 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 led business development and commercial partnerships at Waymo. And Tom Atwood built a predictive analytics startup that sold to supply chain company Project44, where he spent the last two years working on route optimization and infrastructure planning software.
The funding will go toward growing operations, but not to acquiring trucks. Khan said those purchases will be made with debt — a strategy he’s comfortable with following his experiences in private equity. Khan believes this approach also makes Nevoya more attractive to investors in an environment where there’s still a lot of hesitance around hard tech. While he said his team “kissed a lot of frogs,” that process led them to investors like RedBlue — which is run by the former founding partner of transportation startup fund Maniv Mobility, Olaf Sakkers.
“Those guys 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.”
Khan stressed that competing with diesel trucks on cost will be hard. But that pressure is mitigated by how easy it has been to strike up conversations with companies that ship goods through the LA area.
“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 these 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 is so exciting about building this business is that you will get through the door at any shipper in the United States,” Khan said. “We have not failed there once — as soon as you say you have electric vehicles, they pick up the phone. They escalate.”
As it signs on more companies, Nevoya’s software can efficiently piggyback shipments from different customers to get the most out of the electric trucks in its fleet. That helps it lower 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.
Nevoya is also eyeing geographic expansion in the United States. It’s starting that push with a market that is about as different as its home base as one can find: Texas.
Despite the myriad social and political differences, Khan views Texas as a similarly well-suited state to drum up business. It may not have the pot-of-gold incentives like California, but Khan said Texas’ 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.
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