By Abigail Summerville
NEW YORK, April 16 (Reuters) - Private equity firm TPG has made a $100 million investment in Zum, in a deal that values the student transportation company at around $1.7 billion, Zum told Reuters on Thursday.
The valuation marks an increase from Zum's 2024 Series E funding round, when it was valued at $1.3 billion, and follows the company reaching breakeven adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), Zum said.
The investment is being made
through TPG’s Rise Fund, its impact investing arm that targets both financial returns and measurable social and environmental outcomes, taking Zum’s total capital raised to $430 million.
Founded in 2016 by Ritu Narayan, Zum provides software and services aimed at modernizing the fragmented U.S. student transportation system, including electric buses, route optimization and tracking tools. The company said it serves more than 4,500 schools across 17 states.
"Our ultimate goal is to bring (Zum) to all 26 million students who are taking the student transportation platform every single day," Narayan said in an interview with Reuters.
"And the school districts see reduced absences and improved learning outcomes...We'd consider that student transportation is not just about transportation, it's about access to education," she said.
TPG's investment will help the company expand into additional states and further develop its technology platform, she said. It may also pursue acquisitions, and could consider an initial public offering in the future, but organic growth is its top priority.
"This business ... is operating in a very large, $50 billion highly fragmented market," said Steve Ellis, a managing partner of TPG’s Rise Funds. "None of the existing legacy operators have built a modern, fully integrated technology stack...It creates a real right to win." Ellis will join the company's board as part of the investment, the company said.
(Reporting by Abigail Summerville in New York, editing by Echo Wang and Lincoln Feast.)
