When electric vehicle startup Telo Trucks announced its pint-sized pickup, people predictably went crazy. There’s a strain for whom small trucks aren’t just convenient, but a way of life, that major automakers have largely ignored for the past 20 years as they chase high-margin full-size pickups. With little more than a few renders and early prototypes, the company has amassed nearly 3,000 reservations.
But in the last few months something less expected happened. Fleet customers also went crazy.
“There’s this unspoken thing where fleet companies that work in cities can no longer buy small trucks,” Jason Marks, Telo Truck’s co-founder and CEO, told TechCrunch. “They used to be loved: They were perfect for those fleet applications for inner-city cities, but they’re gone.”
What some fleet managers have resorted to is buying neighborhood electric vehicles, which are basically turnkey golf carts that can be equipped with a small bed in the back. But because these low-speed vehicles can’t be used on the highway, the fleet must also purchase and maintain a full-size pickup to be able to accomplish everything it needs to.
“It’s a unique opportunity, because we have this huge hole in the market,” Marks said. “We will continue to want to address early adopters and we want to combine that with delivering to larger fleet customers at the same time.”
With this opportunity comes more funding. TechCrunch has learned exclusively that Telo has raised a $5.4 round from Neo and Spero Ventures. Spero venture partner and Tesla co-founder Marc Tarpenning will join the board.
“He was always someone we could call and say, hey, we have this idea, what do you think? And so when it came time to do a round, you know, we thought it was very appropriate to invite him to join our company,” Marks said.
Marks said the new funding will help Telo develop deeper relationships with potential fleet customers and develop two “fully functional press vehicles” that will have the look, feel and fit and finish of the final product. “People can get into it, they can drive in it, they can really feel it.”
Telo recently completed adding a roll cage over the chassis prototype, and Marks said the team is working to address various technical challenges, including how a vehicle with a rigid front end can protect its occupants in the event conflict. He had no details to share, but hinted that they would be looking at something beyond crinkle zones.
Telo recently completed work on a prototype roll cage. Image Credits: Telo Trucks
“They still leave a lot of material in that space,” he said. “And that’s fine when you have a stationary block of iron that is an engine. But when you have a discrete crease area, you can do some more unique things that don’t have that leftover material.”
For any automotive startup, the ramp to production is perhaps the biggest hurdle. Marks acknowledged that, saying that to keep manufacturing costs down, the Telo uses off-the-shelf components with a few modifications. The startup also wants to work with contract manufacturers, possibly domestic, that produce on a smaller scale, something on the order of 500 to 5,000 vehicles instead of 50,000 or 500,000.
“We want to get to profitability at low volumes for specific use cases that we’re niche in, that we’re not competing with a lot of people,” Marks said.
Low-volume production would help avoid some of the challenges other entrants have faced. Rivian is particularly similar in that it goes after both consumer and fleet customers, although its production ramp is radically different. That’s partly because it’s going after consumer-focused trucks and SUVs, segments in which there is already established competition.
Tello doesn’t have the same concern. Even today’s midsize pickups like the Ford Ranger and Toyota Tacoma are far from compact, giving the Telo potential breathing room that others haven’t enjoyed. It won’t own the market forever, but it might be enough time to help them get through the scaling phase that has tripped up many of its peers.
