Telo Trucks raises $20 million to make compact electric pickup truck

By Akash Sriram

(Reuters) -Telo Trucks has raised $20 million in an oversubscribed Series A round to make its compact electric pickup, as the startup bets on a capital-efficient model to succeed in a market littered with failed EV challengers.

The funding, led by Telo co-founder and designer Yves Béhar and Tesla co-founder Marc Tarpenning, shows investors are still willing to back entrants despite a string of bankruptcies that followed the post-pandemic EV listing boom. Other investors include Salesforce CEO Marc Benioff, E12 Ventures and Nova Threshold, Telo said on Tuesday.

"The graveyard of electric vehicles from the last 20 years almost all spent billions of dollars chasing high-volume production. What we’re doing is bringing a unique product to market that doesn’t exist right now and stepping our way into volume the way Tesla did with the Roadster and Model S," CEO Jason Marks told Reuters.

The startup says it can stay capital efficient by using contract manufacturing while focusing its own resources on battery packs, design and crash safety engineering.

Founded in 2023, Telo Trucks has built the MT1, an all-electric mini pickup designed for U.S. cities. Roughly the size of a two-door Mini Cooper, the MT1 can fit five adults and a five-foot truck bed, matching the cargo capacity of larger pickups.

The San Carlos, California-based company has over 12,000 pre-orders from city municipalities, construction firms and delivery companies, among others, representing over $600 million in potential revenue. Still, questions loom over whether startups like Telo can avoid the fate of peers that went public via blank-check mergers only to collapse under cash burn and missed targets.

“If we can deliver just over half of the 12,000 reservations, we can hit unit profitability. Our strategy is about getting to profitability at low volume, not chasing 150,000 units a year," Marks said.

(Reporting by Akash Sriram in Bengaluru; Editing by Sahal Muhammed)