Francisco Loehnert: starting and scaling a LatAm market leader
How did you get the idea for Awto and what made you start the business?
Awto emerged from the need to address traffic problems, congestion, and emissions of polluting gasses in urban areas. These solutions also aimed to provide more accessible and economical transportation options for people, allowing them to use vehicles only for the time they truly needed them. The Kaufmann Group, a leader in the automotive industry in Latin America, seeking exceptional mobility services, decided to partner with a group of entrepreneurs to bring this startup to life in the year 2016.
Awto is not a simple car sharing platform but more of a platform concept. Can you walk us through the business model and how do you differ from competition?
Awto's business model is based on offering users temporary access to vehicles that can be reserved and used according to their needs. This model focuses on providing a flexible and sustainable alternative to fleet usage by maximizing the vehicle's usage time (private vehicles are stationary 95% of the time), minimizing parked time as much as possible. Today, we are creating a truly mobility ecosystem, investing in subscription models, corporate services, and mobility as a service, among other things.
In both car sharing and a broader mobility sector, profitability has always been a pain point. Many high-quality businesses are yet to turn profit. Where are you on the road to the positive bottom-line?
Awto achieved profitability in Chile for the first time in May 2021 and was profitable the whole 2021 and 2022. Now, we have been investing a lot in order to create the installed capacity for the operation in Brazil plus selling fewer vehicles to increase our presence in the Chilean market; therefore achieving profitability in some months (but not in all of them) during 2023. The objective is to achieve break-even in whole Awto Latam (including Awto Brazil where it started operations in December of 2022) by the beginning of 2026 (considering the execution of a Series B fundraise in the first semester of 2024 and that additional horizontal expansion be done as budgets allow).
Awto started in Chile and grew there for six years before expanding abroad. How has Chilean tech ecosystem evolved during those years?
The Chilean government has implemented various initiatives and programs to support entrepreneurship and innovation. Availability of VC in Chile has also increased, enabling startups to secure funding. The ecosystem has seen the emergence of successful startups and notable exits, contributing to a more mature and robust environment.
You chose Brazil as your first international expansion. Why Brazil instead of other Spanish-speaking LatAm, and how different Brazil is from the rest of the region?
Brazil itself is almost a continent that also has great economic stability in the region. We conducted a market attractiveness model in Latin America with different variables. Through this, we visited more than 20 cities. We realized that in Brazil, it was essential to do business with a local team. As a result, we decided to join forces with two serial entrepreneurs with experience in shared mobility, which was a key factor in making the decision.
Where do you see Awto in 5 and 10 years? What is your final vision?
We see an optimistic future, with a less polluted and less congested Santiago, Buenos Aires, São Paulo etc.; we want to contribute our grain of sand to achieve this. Each Awto is already taking 6-7 private vehicles off the roads, and there are four essential trends that will continue to happen, and we want to compete in all of them: car sharing, vehicle connectivity, electromobility, and autonomous driving. Our purpose is that "sharing is the KEY in a growing society, on a planet that remains the same size."
