MPower Partners Fund invests in newmo, a rapidly growing taxi and ridesharing startup in Japan, aiming to enhance transportation accessibility and improve the lives of drivers while addressing pressing industry challenges.

Information on the Target

Newmo is an innovative startup in the transportation sector, focusing on taxi and ridesharing services with the mission of "making communities more colorful through mobility." Founded less than a year ago, newmo has rapidly grown its footprint by acquiring management rights to two taxi companies in the Osaka area, resulting in a fleet of over 600 taxis and a workforce of approximately 1,000 employees. The startup is dedicated to enhancing transportation accessibility, especially in underserved tourist and rural areas, while also aiming to improve the employment conditions and standard of living for drivers. To achieve its goals, newmo is leveraging digital transformation (DX) and refining management practices at its taxi offices to attract new graduates and ensure a sustainable workforce.

Industry Overview in Japan

The Japanese transportation industry is currently grappling with significant challenges, particularly in the taxi sector, which has seen a steady decrease in active vehicles, dropping from approximately 222,000 vehicles in 2008 to 173,000 in 2023. This contraction is exacerbated by structural labor shortages that affect the entire region, including the taxi industry. About 80% of taxi businesses in Japan are small and medium-sized enterprises (SMEs) that typically operate 30 or fewer vehicles, which leaves them vulnerable in a competitive market recovering from the impacts of the COVID-19 pandemic.

Despite a resurgence in demand for taxi services—driven by both tourism and corporate travel—2023 marked a troubling milestone with a record high number of bankruptcies among taxi operators, totaling 33 insolvencies, the worst