At GIC Insights 2024, GIC’s annual thought leadership event, Ritu Narayan, Founder and CEO of Zum, shared her work disrupting the US student transportation market, turning electric buses into large batteries for a more resilient grid, and overcoming funding challenges.

The following is an adapted transcript of Ritu’s full interview and has been edited for clarity and brevity.

What inspired you to found Zum?

RITU: A few years back in 2013 or 2014, I was working at eBay and was having this challenge of – how do you pick up and drop off your children while you’re still at work?

Interestingly, my mom, who was in India 30 years before that, had left her job as an educator because of the exact same challenge. It was an ‘aha’ moment for me — that nothing had changed in so many years. Here I was sitting in Silicon Valley, facing the same exact problem. This problem is universal. This problem is generational, and [I thought] why has nothing been done using technology?

That curiosity and the pain that I was going through then inspired me to start Zum.

What is Zum’s mission and what is a recent milestone for you?

RITU: Zum is working at disrupting the largest mass transit system in the US, which is student transportation.  It is a US$50 billion market. 27 million kids commute twice daily. Even on the second largest mass transit system, airlines, only nine million people travel on a given day. It’s an essential service for schools and school districts.

We have been disrupting this area using technology and our goal has been to electrify the buses. There are half a million school buses on the road, but less than 2% of them are electrified. Recently, Oakland Unified became the first [school] district in the country to be fully electric. The unique thing is that all the 74 buses there are bidirectionally charged.

We have enabled this entire playbook and ecosystem, live, starting in August of 2024. What that means is there is clean and sustainable transportation for children, but at the same time, we provide grid resiliency in this area. In just the first five days of going live, we provided 1.9 megawatt (MW) [of] power back to the grid.

Our goal is 2.1 gigawatt-hours (GWh) in the entire year, which can power hundreds of homes in Oakland.

Electric buses are still much more expensive compared to their diesel-fuelled counterparts. How have you addressed this cost challenge?

RITU: The price of electric buses is two to three times more than that of traditional diesel buses.

Even though the price is coming down with falling battery prices, we are still at a stage in the cycle where the price is not at par with diesel buses. We have worked on a couple of things: in the short run, making use of grants, both from the state level and the federal level to bring the cost down; and the second thing is, we are developing vehicle-to-grid (V2G) infrastructure — bi-directionally charging infrastructure.

By doing that, we are able to sell the excess capacity, which is left there in the school buses at the end of the day, to the grid.  That also provides revenue to bring the cost of electrification down and make it sustainable.

We believe the playbook that we have implemented in Oakland can be easily scaled to any district across the country.

How can climate tech firms overcome funding challenges to successfully scale?

RITU: The beauty of the business model of Zum was that right from the beginning, electrification was a second act for us. In the first act, the entire student transportation — an 80-year-old industry, highly antiquated, with the use of no technology — we were digitising that. We were making that system more efficient, modern, transparent, and winning very large contracts from the districts; contracts of tens of millions of dollars, multiple years, anywhere from 5 to 10 years. By having that foundation, it has allowed us to now electrify that infrastructure. That is because those contracts are in place and we have the running revenue from providing the transportation. That allows us to do these kinds of projects of electrification.

At this point, Zum is a post-series E company — late-stage growth, with GIC leading our last round. As we were raising funds, the narrative and the metrics are a critical part of the fundraise. Bringing the investors along and making sure that they are part of it is also super critical.

The third way is there are always state grants and other type of grants available, which companies can make use of to fill the gap and continue to survive and thrive.

What’s one key challenge you are currently facing?

RITU: Our service is super simple on the surface of it. Anybody in America can understand it because pretty much everybody has taken the yellow school bus, either as a parent for their children or as children themselves when they were little. The story is very understandable.

But behind the scenes for scaling, there are many components that come together, including the financing and digitisation of the infrastructure. For us, since we are disrupting a very old, 80-year-old industry, we are continuously making changes in different parts as we grow and find out, “Oh, this area now affects us”, which we never thought about at a certain point.

So, as we go across the country, it is about continuing to disrupt and making sure that the industry is in alignment with the modern way of doing things. Since Zum is a pioneer in it, that naturally means that we are the first ones to face the challenges and ensure that they are taken away.

What’s one bold prediction you have for your business, the wider industry, or the world?

RITU: My thesis is that climate change is inevitable, so electrification is the way to go. I am a strong believer on that point.

With electrification, our grid is not ready to provide that kind of charging. Just in our local area in Northern California, the electricity utility wants to subscribe 3 million electric vehicles so that they can get their energy back. This kind of infrastructure, where you are not only providing the electric vehicles, but also providing charging back to the grid would be pretty critical.

What have been your top leadership lessons?

RITU: If you nail the narrative at different points of time, you can align all stakeholders, whether it’s investors, whether it’s your employees and team, whether it is your third-party people who are working across it. For Zum, the narrative evolved over a period of time, from being consumer-focused, to being focused on the districts, to being focused on electrification.

One thing we have always done is that we have been very clear about our North Star and what the narrative is. I would say that’s one strategy I would advise all leaders to use — it really allows you to quickly align all the stakeholders and bring the maximum impact.