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Rental car startup Kyte , which bills itself as the “ in force option to Hertz , ” is pulling out of almost all of its major food market in the United States and has cut its workforce roughly in one-half in a bid to survive after exploring a sale earlier this yr .
The company is shrinking its operations to focus only on San Francisco and New York City ( include Jersey City ) as it works to reach profitability in the next 18 months , CEO Nikolaus Volk told TechCrunch . Kyte has been exiting other major grocery like Atlanta , Chicago , Boston , Washington , D.C. , Philadelphia , and Seattle . It set out tell customers in Los Angeles that it is suspending operations in that city after November 7 , as CurbivorereportedThursday .
Volk said Kyte recently cut between 40 % and 50 % of its workforce . The engineering , consumer , and growing Cartesian product team were among the most heavily affected , former employees told TechCrunch .
“ In a cap - constrain environment , where capital is exceedingly expensive , we have to concentre on our strongest markets , ” Volk said . “ Hard decisions had to be made for sustain the clientele here . ” Volk noted that New York and San Francisco are Kyte ’s big markets , report for about 70 % of its revenue .
Kyteraised$9 million in 2021 andcloseda $ 60 million Series B in 2022 , all on the premise of being a flexile , comfortable - to - economic consumption rental car service that would go so far as to deliver the fomite to your door . When announcing the Series B rise , the company said it wanted to be the world ’s “ largest operator of shared , electrified , and self-directed fleets . ”
The company chop-chop elaborate to more than a twelve market in the U.S. , and started borrowing heavily to finance the leverage of its vehicles . The companystruck a $ 200 million debt financing dealin 2022 with Goldman Sachs and Ares Capital , andanother$250 million understanding in March 2024 with Barclays and Waterfall Asset Management .
Over the summertime , though , Volk said it was becoming readable that the unit economic science of Kyte ’s business did not currently work well enough to sire gratis cash menstruum in those markets . He say his team explored selling the business at one point but decided to reconstitute instead in favour of turn over profitability first .
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That was only go to be possible if Kyte narrowed its focal point , he tell , hence the restructuring . Volk also said that the company recently fill in a young fundraise to capitalise the reconstitute business , but he say he was not ready to share how much .
The rental and subscription car service space has go through hard metre recently , especially for troupe that lean heavily into electrification .
Hertz suppose in 2021 that itwas going to purchase 100,000 Teslasto fill its rental fleet with electric cars , but the company wind up only purchasing around 35,000 . It sold the majority of those earlier this year . Autonomy , a startup create by TrueCar founder Scott Painter , fell far short of its own destination to build a fleet of 23,000 EVs ; sooner this year itannounced a pivot to selling software services and data .
Despite the claim Kyte made in 2022 , Volk said his company never got too deep in the procedure of fill its fleet with eV — something that may have take into account the company to attempt this restructuring at all . That “ was very adept , retrospectively , that we did not drop off a clustering of capital here on residual values fall down , ” he said .
This floor has been updated with extra context about revenue and John Cash stream in Kyte ’s markets .
