Dallas’ own rideshare service, Alto, has completed a $45 million round of Series B financing—its largest yet—to continue propelling national growth and transforming the industry. The infusion of capital will fund a major pivot for the local startup: Going electric.
Alto has been on a fast expansion track since its founding in 2018. It joined the on-demand ride-hailing market with a different approach than giants like Uber and Lyft: Alto rethinks the gig-based model as the first to hire its drivers as W-2 employees. Today, Alto is most recognizable in its cities of operation (Dallas, Houston, and Los Angeles) by having its own luxury fleet of white branded vehicles transport customers.
Now, Alto has more plans to shake up the industry. The team is transitioning that fleet to be all electric by early next year, with the intent to have the country’s first 100 percent EV ridehail fleet by the end of 2023.
Alto told Dallas Innovates that eventually, all of its existing vehicles will be replaced with EVs, amounting to more than 3,000 vehicles. The move—coupled with Alto’s commitment to clean, safe rides—will make for a sustainable solution for cities that meets the growing demand for more eco-friendly alternatives, the team says.
“We are excited to have such strong support from investors who share our vision for revolutionizing the rideshare industry,” Will Coleman, the founder and CEO of Alto, said in a statement. “With this new funding, we’re on track to take Alto’s safe, consistent, and hospitable service across the country, and are set to become the world’s largest fully electric ride-hail fleet operator over the next two years.”
The Series B was co-led by Tuesday Capital and Goff Capital. New investors included Franklin Templeton, Alumni Ventures Group, Senterra, Green Park & Golf Ventures, and Hope Ventures Capital.
The new round brings Alto’s total capital raised to $60 million.
“Tuesday Capital is proud to invest in the future of ride-hailing and transportation with Alto,” Patrick Gallagher, co-founder and managing partner of Tuesday Capital, said in a statement. “Alto is changing the paradigm in ride-hailing—turning what was once a gig into a sophisticated, vertically integrated operating company capable of delivering a better experience and more value for customers, drivers, and local communities.”
In September, Alto made its first expansion outside of its home base of Dallas by heading into Houston. Los Angeles followed not long after.
But the new funding will more than triple Alto’s geographic footprint, according to the team. They say that by the end of this year, Alto will be a coast-to-coast brand, continuing a strong growth pace for the young startup.
The team credits its success to its unique business strategy. The Alto app acts as a passengers “remote control,” allowing them to set the “vibe” with music, conversation, and light preferences.
In addition to each driver being a W-2 employee, all are heavily vetted, trained, and monitored by company leadership. And, vehicles undergo daily service checks, deep cleaning procedures, and between-ride cleanings with EPA-registered disinfectants.
That’s to ensure that Alto continuously “sets the standard in safety, cleanliness, and quality.”
Alto’s commitment to cleanliness was only heightened during the COVID-19 pandemic. Each vehicle is now equipped with custom plexiglass barriers and a HEPA cabin air filter that it says removes 99.9 percent of airborne particles. Interiors are treated with an EPA-registered sanitizing mist called PermaSafe, which, according to Alto, kills 99.9 percent of bacteria and viruses like COVID-19.
“Customers have a new level of expectation for cleanliness and safety and expect a new level of trust,” the team told us. “They need to trust that transportation providers will protect them and keep them safe at a whole new level. Alto’s unique business model and the control it has over its fleet and drivers allow the brand to build this trust and deliver on the promise of safety and cleanliness. And that’s been the priority since day one.”
Alto also made a series of moves throughout the pandemic to keep business flowing.
When most of were stuck indoors, Alto launched its own on-demand delivery service to help both Dallas-Fort Worth companies and consumers. Alto drivers shopped, purchased, and same-day delivered from local brands like Whiskey Cake, Commissary, and Gardenuity.
The Market, a digital storefront created by Alto, features on-demand delivery service options—essentials, meals, and ready-to-cook items—from establishments in the region.
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