London-based Forest joins a select few micromobility companies to have reached profitability thanks in large part to its unique advertising business model.
The operator broke even this summer from revenue generated from its adtech platform while still facilitating affordable rides for customers.
Launched in 2020, Forest’s profitability is something that Europe’s larger micromobility players have been unable to achieve.
“Since the start of Forest, our intention has been to grow steadily and become financially self-sustaining,” CEO and Founder of Forest Agustin Guilisasti told Zag Daily.
“As a second generation micromobility company we were able to learn from the sector’s chequered past.
“This summer we hit that milestone thanks to our adtech business model and by constantly pushing to be operationally efficient.”
This comes just as the startup announces a further £5 million of funding, bringing the total raised in its Series A to £17 million. Forest will use the money to invest more into its advertising technology business model amongst other areas.
The company secured investments from venture capital firms Güil Mobility Ventures and Fen Ventures and it also received further funding from sustainable finance specialist Triodos Bank UK.
Forest’s Adtech platform
Forest will use the equity investment from its backing venture firms to develop its advertising technology platform which currently connects brands to Forest’s users.
“The software on the Forest app allows corporate partners to share their message with our sustainably-minded users via a range of in-app mechanisms,” Agustin said.
Partner companies can pick from three primary touchpoints to connect with Forest’s users: ‘Journey Ads’, ‘Map Ads’, and ‘Video Ads’.
‘Journey Ads’ send users a message prior to their ride. ‘Map Ads’ allow companies to integrate their logo into the Forest map whilst highlighting points of interest along their route. ‘Video Ads’ reward users who watch a partner video outside of their ride with a free additional minute of riding.
40% of Forest’s users are watching the video advertisements to earn the extra minute of riding.
“Forest’s adtech gives the users a tangible benefit in the form of free rides, so the technology has a real world impact,” said Agustin.
To further develop its advertising technology platform, the company is looking to create an in-app ‘Offer Wall’ which lets users engage with partner content in one clear space.
Whole Foods Market, Shakespeare’s Globe and UPS are among the partners that have joined Forest to run sustainability-focused consumer products.
The finance from Triodos Bank will support the expansion of Forest’s London fleet which has reached 500,000 users, riding across twelve London Boroughs since the company launched in 2021. Forest will also be adding Kensington and Chelsea, Westminster, and Haringey to its operational area after securing agreements with these boroughs.
“We are working with councils to ensure we are able to provide the number of bikes they want across their boroughs. We focus on winning licenses, and then we build out the fleet in line with their visions and requirements,” Agustin said.
Expanding the London fleet follows Forest’s launch of its ‘River e-bikes’ earlier this year where 5% of ride proceeds are donated to The Rivers Trust in an effort to restore UK waterways.
The fleet growth won’t stop in London. Forest’s new funding is hoped to gear the company up for European expansion too.
“We are aiming to launch in a large European city where we know usage of the bikes will be as impressive as it is in London, and where our adtech partners will find a captive audience through our platform.”
The funding will also be used to improve Forest’s parking compliance software through a partnership with software company Captur.
“This software needs to be constantly honed to ensure it meets the requirements of each individual borough while also not disturbing the user experience.”
Alongside the extension to its Series A funding round, the London startup has brought entrepreneur, environmentalist, and best-selling author Lisa Gansky onto its board.