Read time: 5 minutes

Good morning! It's Friday, February 9th. Today, we’re featuring Zum, the company bringing innovation to America’s largest mass transit system: school buses!

THE FEATURE

Innovating School Transportation— Zum’s $1.3B Journey

Web-based tracking has been around since the early days of the internet— UPS went from tracking 600 packages a day in 1995 to 3.3M in 1999. 

Decades later, there still isn’t a widely adopted tool to track the transportation of the things most important to us: our children.

Zum has set out to change that with its fleet of electric school buses and proprietary software that provides real-time transportation tracking to school districts and parents. 

This month, Zum attained unicorn status with a $140M funding round that valued the company at $1.3B!

So, What's the Business?

Few companies have tried to break into the student transportation industry and innovate, but that doesn’t mean it isn’t a massive market vulnerable to disruption. In America, over 26M children ride on school buses each day, making it a larger transit system than airlines, trains, and city buses.

Zum was founded by Ritu Narayan in 2015, and it is now positioned as a viable competitor to the deeply entrenched $50B industry of large yellow school bus fleet operators. 

While Zum’s school buses are still painted in the traditional yellow, the way they operate is anything but traditional. Using cloud-based software, bus drivers can follow an adaptive routing system, and parents and supervisors can track where the children are in real time. Plus, they are easier on the environment— Zum’s recent funding rounds set the company on track to electrify 100% of its fleet. 

Zum started gaining traction in 2018 when several California school districts solicited the company for “alternative transportation” needs. This involved busing for abnormally long routes or for special needs students, with small contracts paying out between $50K and $1M. 

The company’s big break came in 2020 when it won over Oakland Unified School District for $11.5M annually to bus all its special education students. Later that year, Zum used a funding round to become a “full-stack” bus service. With its newly acquired fleet and track record with the Oakland Unified School District, Zum struck a five-year contract with San Francisco’s public school district for $152.1M!

How They Win: Being Prepared to Take a 180° Pivot

Zum today is a disruptive force in the school transportation industry, but that isn’t what its founder, Ritu Narayan, originally envisioned. 

Narayan grew up in Delhi, became a software engineer, and went on to work in the United States at Oracle, IBM, Yahoo, and finally eBay, where she ran a senior product team. 

On top of all that, she was a mother who struggled to juggle her career with transporting her kids to school and extracurricular activities. She knew she wasn’t alone in those struggles and set out to create a ridesharing service like Uber designed specifically for getting kids around. 

Between 2015 and 2018, Zum had a sizable consumer base from advertising to California parenting groups on social media. 90% of its customer base used Zum every week, and 40% used it daily. 

At the same time, school districts were coming to Zum in search of a provider for 10%-20% of its routes that weren’t appropriate for its school buses. It wasn’t long until its school district contracts were its primary revenue source. 

This forced Naryan to make a tough decision. For her company to reach its maximum potential, she knew she had to transition fully into servicing school districts and, as a result, abandon her founding mission and product built for parents. 

Her lesson to founders is encapsulated in the following quote: 

“I couldn’t be so attached to where I came from that I couldn’t see where I was going.”

Get In Touch

1) Promote Yourself! Get in front of 7,000+ business professionals by sponsoring this newsletter (we ❤️ our sponsors). Just hit reply to this email and say, "Let's partner!"

2) Do You Have An Outlier Business? We want to share your story if you are building something cool and growing fast. Hit reply to this email and tell me - what you're building, why, and why it's an outlier business.

3) Ask Us Questions: Are you struggling with a business or career question? Just ask it, and we'll share it with thousands of people who want to help.