A Shockoe Bottom-based vehicle delivery app is gunning the engine on growth with a new haul of investor cash.
HopDrive, which acts as an Uber-like service to facilitate short-distance deliveries of vehicles by gig workers for fleet management companies, dealerships and auto shops, has closed on a $8 million capital raise.
The company said Tuesday it intends to use the funds to expand into Baltimore, Nashville and Orlando in the next 90 days.
HopDrive CEO and co-founder Nick Mottas said those markets were selected because existing customers are already operating in the areas and they want HopDrive to join them. Mottas declined to identify the company’s customers.
The company’s longer-term expansion plan is targeting an additional 20 markets over the next two years. The company currently has a presence in nine markets: Richmond, Raleigh-Durham, Charlotte, Atlanta, Philadelphia, Dallas, Houston, Phoenix and Chicago.
The new capital will also be used to increase the company’s employee headcount; Mottas said HopDrive has already made three new hires out of a planned minimum of eight new team members in connection with the raise. The company is focusing on adding tech workers to its ranks and may add more employees as it expands into new markets.
Mottas said the company currently has slightly fewer than 30 employees. The cash infusion is expected to power operations for two years.
The successful capital raise came despite fears of a recession, Mottas said. The company began seeking funding in June and wrapped up the round in the fall. Mottas attributed the success to existing relationships and connections.
“We went through it starting in the summer. There was a lot of economic uncertainty at that time,” he said. “That didn’t affect our ability to get meetings. It was different raising our Series A compared to other rounds, probably because we established a lot of relationships along the way.”
Cox Enterprises, which is the parent company of Cox Automotive, led the latest equity round. Venture capital firm Overline, which led a previous $1.5 million seed round, as well as automotive logistics company Acertus and Ally Ventures also contributed to the latest round, per HopDrive’s announcement.
HopDrive has raised just under $11 million to date, Mottas said.
In addition to market expansion and hiring, HopDrive plans to use funds to further improve its software.
HopDrive pitches its concept to clients as an alternative to maintaining their own in-house staff of drivers. Mottas said that most of HopDrive’s business these days is moving around vehicles for fleet management firms and handling concierge pickup service for auto service centers. Mottas declined to share how many cars HopDrive moves monthly.
Mottas and Rob Newton founded HopDrive in 2018. The company was formerly known as Social Auto Transport and rebranded in 2021.
The company is based in Startup Virginia, a business incubator in Capital One’s Michael Wassmer Innovation Center in Shockoe Bottom. The center recently changed its name from the 1717 Innovation Center.
Very cool! Congratulations Rob, and all the best to you and HopDrive!