The Asset-Heavy playbook: Why Yulu Chose the Harder Path
While everyone builds asset-light marketplaces, one founder is proving that owning heavy assets can create unbreakable moats.
In this week's Founder Thesis deep dive, I unpack a contrarian bet that's paying off: How Yulu's Amit Gupta went against Silicon Valley wisdom to build India's most defensible mobility business.
I had the privilege of hosting Amit Gupta, a two-hour deep dive into the mind of the serial entrepreneur who built India's first unicorn (InMobi) and is now revolutionizing urban mobility with Yulu. What struck me wasn't just his impressive track record—it was his willingness to make the hardest possible bet in business: going asset-heavy in an asset-light world.
The numbers are staggering: 45,000 vehicles, ₹123 crore annual revenue (FY2024), EBITDA positive, and here's the kicker—a theft rate of just 0.6%, the world's lowest for shared mobility. Yulu's current revenue run rate (ARR) is estimated to be around Rs300 crore. While everyone else chases asset-light dreams, Amit chose to own every bike, every battery, every charging station.
Why? Because sometimes the hardest path is the most defensible.
This article draws heavily from my Founder Thesis episode with Amit. You can listen to the full deep dive here: podm.in/yulu
The Asset-Light Obsession (And Why It's Not Always Right)
Walk into any VC meeting today and mention "asset-heavy," and you'll see investors physically recoil. The startup playbook has been rewritten around asset-light models: Uber owns no cars, Airbnb owns no hotels, Amazon started by owning no inventory.
The data backs up this preference. Ernst & Young's research of Fortune 500 companies shows asset-light businesses outperformed asset-heavy peers by 4 percentage points in total shareholder returns. BCG found that asset-light companies deliver better returns on assets and lower profit volatility across multiple sectors.
But here's what the data also shows: Asset-light works brilliantly—until it doesn't.
The same research reveals asset-light businesses face critical vulnerabilities:
Heavy partner dependence (supply chain disruptions kill you)
Limited quality control (you're only as good as your weakest partner)
Reduced profit margins (you must "pay rent" on assets you don't own)
Lower barriers to entry (if you can do it, so can anyone else)
This is where Amit's contrarian thinking kicks in. While the conventional wisdom says "go light," he looked at India's unique market conditions and made a different bet.
The Indian Reality Check
"In India, 85% of people don't have bikes, they don't have driving licenses. But they know how to ride a bicycle and they can use Yulu very easily."
The global bike-sharing market tells a sobering story about asset-light approaches:
Paris lost 80% of its initial 20,600 Vélib' bikes to theft/vandalism in just 2 years
Baltimore shut down its entire program after bikes were stolen faster than they could replace them
Industry average: 5-10% of fleet stolen/destroyed annually (some systems see up to 10%)
Global recovery rate: Less than 5% of stolen bikes are returned to owners
Compare this to Yulu's 0.6% theft rate—that's not luck, that's engineering.
The micro-mobility market is exploding: The global bike-sharing market reached $8.26 billion in 2024 and is projected to hit $11.96 billion by 2029. In Asia-Pacific alone, the market commands 86.5% global share, with India at the epicenter of this growth.
But here's the catch: most shared mobility companies are bleeding money because they can't solve the fundamental asset protection problem.
The Secret Sauce: Purpose-Built for Abuse
"Our bike is built not for usage, it is built for abuse. It's a different design thinking altogether."
When Amit decided to go asset-heavy, he didn't just buy bikes—he engineered an entirely new category of vehicle. Working with Bajaj Auto, Yulu created the first purpose-built shared mobility vehicle designed for Indian conditions.
The engineering specs read like a fortress blueprint:
Legal Genius: Capped at 25km/h, 250-watt motor, 60kg weight—technically a "bicycle" under Indian law, requiring no license or helmet
Anti-Theft Architecture:
All fasteners custom-designed (stolen parts have zero resale value)
Purpose-built components (your stolen Yulu tire won't fit any other bike)
No physical keys (IoT-controlled locks only)
200+ data points captured every 100 milliseconds
Market Intelligence Network:
Partnership with scrap dealers (if someone tries to sell stolen parts, Yulu knows)
GPS tracking with location trails
Private "bike marshals" in every city
CCTV networks leveraged for theft prevention
The result? While industry averages show 5-10% annual theft rates, Yulu achieved 0.6%—the world's lowest.
The Data Goldmine Hidden in Hardware
Here's where Yulu's asset-heavy approach becomes a unfair advantage that no asset-light competitor can replicate.
Every Yulu bike generates 200 data points every 100 milliseconds. Think about that: location, battery health, engine performance, vibration patterns, usage behaviors—all flowing back to Yulu's servers in real-time.
This data powers predictive maintenance that transforms unit economics:
"We have now a very intelligent system which is able to predict the life of every component for that context. My shock absorber has a lower life in Bangalore because roads are more bumpy, but better life in Delhi which has better roads. But my city of Mumbai has a lot of rusting because of coastal climate."
The financial impact is massive. Instead of blanket maintenance schedules, Yulu can predict exactly when each component will fail, in each city, for each use case. This eliminates both:
Premature replacement costs (changing parts too early)
Breakdown costs (changing parts too late)
No asset-light competitor can build this level of intelligence because they don't own the assets generating the data.
The Gig Economy Goldmine
COVID changed everything. When Yulu's office commuter business disappeared overnight, they discovered something remarkable: gig workers were using their bikes for deliveries.
"85% people don't have bike, they don't have driving license. Due to COVID, everyone was clicking button, getting their food, grocery, medicines. So there was a huge demand for bike-like vehicles for gig workers."
Today's numbers tell the story:
45,000 vehicles in Yulu's fleet
40,000 (89%) used for goods delivery
₹200/day average rental fee
Zero customer acquisition cost (supply-constrained market)
The gig economy insight was crucial: Instead of fighting for B2B enterprise deals (like competing with logistics companies), Yulu monetizes the individual gig worker. This creates a three-way win:
Gig workers get affordable, reliable mobility without bike ownership hassles
Platforms (Zomato, Swiggy, Amazon) get reliable delivery capacity without asset ownership
Yulu captures 100% of the value without competing against deep-pocketed enterprises
Why Asset-Heavy Wins in Emerging Markets
The conventional wisdom about asset-light models was written for developed markets. In markets like India, the calculus changes completely.
Consider the infrastructure reality:
No charging infrastructure for electric vehicles
No reliable last-mile logistics for asset-light partners
Limited quality control systems for outsourced operations
High theft/vandalism rates requiring specialized anti-theft engineering
Yulu's asset-heavy approach solves all of these problems:
Battery Infrastructure: Yulu built Yuma, a separate battery-as-a-service company with 1M+ swaps monthly. No asset-light competitor can replicate this without massive capital investment.
Quality Control: Since Yulu owns every touchpoint, they control the entire user experience. Downtime per vehicle is dramatically lower than industry standards.
Market Defense: The capital requirements create a massive moat.
"You do need a very strategic thinking and design and then execution on that, at the center of that. Who can come and do this? It can happen. But today we do not know anyone with that chops and that long-term thinking."
The Capital Market Paradox
Here's the fascinating contradiction in Amit's approach: He raised $124M+ but remains deliberately supply-constrained.
This creates a flywheel effect:
Limited supply keeps utilization rates high
High utilization improves unit economics
Better economics attract debt financing at lower rates
Cheaper capital enables profitable expansion
Proven profitability enables even more capital access
The progression is already happening:
Current: EBITDA positive (revenue covers all operating expenses)
2024 milestone: EBIT positive (revenue covers asset depreciation)
Future composition: More debt + lease financing, less equity dilution
The Asset-Heavy Playbook for Other Founders
When does the asset-heavy approach make sense? Based on Yulu's experience, consider this framework:
✅ Asset-Heavy Makes Sense When:
Infrastructure doesn't exist (charging networks, parking, maintenance)
Quality control is critical (safety, reliability, user experience)
Theft/vandalism rates are high (requires specialized anti-theft engineering)
Regulatory complexity is high (easier to control compliance when you own assets)
Data capture is valuable (IoT sensors, usage patterns, predictive maintenance)
❌ Asset-Light Makes Sense When:
Infrastructure exists (reliable partners, established supply chains)
Low differentiation required (commodity services, standard offerings)
Low theft/damage risk (secure environments, low-value assets)
Fast scaling is critical (need to capture network effects quickly)
Capital is limited (can't afford heavy asset investment)
The Contrarian Bet That's Paying Off
The data speaks for itself:
₹123 crore revenue (growing rapidly) (FY2024)
EBITDA positive (first shared mobility company in India to achieve this)
0.6% theft rate (10x better than industry average)
45,000 vehicles with expansion across 7+ cities
100M+ rides completed to date
But the real proof is in the moat: Try to replicate Yulu's model and you'll need:
$100M+ in capital for fleet and infrastructure
2-3 years to build anti-theft technology
Strategic partnerships with OEMs for custom vehicles
Regulatory expertise across multiple cities
Operational excellence to achieve sub-1% theft rates
That's not a business model—that's a fortress.
The Bigger Picture: When Conventional Wisdom Is Wrong
Amit's journey from InMobi to Yulu reveals something profound about startup strategy. Sometimes the "obvious" choice (asset-light) is obvious because it's easy, not because it's right.
"We had courage to build the stuff which was not there. Glance was never done. We did that. InMobi was not there. We were crazy enough to do that."
The lesson for founders: Don't choose your business model based on what VCs prefer. Choose based on what the market needs and what you can defend.
In Yulu's case, the market needed:
✅ Reliable, theft-proof vehicles
✅ Purpose-built hardware for Indian conditions
✅ Integrated charging infrastructure
✅ Predictable, always-available supply
An asset-light approach couldn't deliver any of these.
Asset-heavy was the only way to build something defensible.
Key Takeaways for Founders
1. Market Context Trumps Model Preference Don't default to asset-light because it's trendy. Analyze your specific market conditions and choose the model that creates the strongest moat.
2. Difficulty Can Be an Asset The harder your business is to replicate, the more defensible it becomes. Yulu's 0.6% theft rate isn't just an operational metric—it's a competitive advantage.
3. Data Compounds with Asset Ownership When you own the assets, you own the data. Yulu's predictive maintenance capabilities are only possible because they control the entire hardware stack.
4. Supply Constraints Can Drive Profitability Instead of chasing growth at all costs, Yulu deliberately maintains supply constraints to optimize unit economics first.
5. Build for Abuse, Not Usage In emerging markets especially, your product must survive conditions that would destroy consumer-grade solutions.
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