LONDONLOS ANGELES, Sept 18 Reuters A clutch of European and U.S. delivery company startups is racing to serve the growing market for offering zeroemission, electric lastmile deliveries in cities to retailers and consumers before giant shippers do the same.

The likes of Germany39;s Liefergrun, the UK39;s Zedify and Packfleet, and New Yorkbased DutchX are tapping into retailers39; need to hit environmental, social and corporate governance ESG and emissionreduction targets. Collectively, zeroemission delivery startups have raised around 1 billion so far, according to Pitchbook and data collected by Reuters.

They hope to grab market share during the long lead times while industry leaders are still gearing up. For instance, FedEx targets 2040 for its zeroemission delivery fleet; Deutsche Post DHL Group says 60 of its delivery fleet will be electric by 2030, the same year that Amazon plans to have 100,000 Rivian electric trucks in service. United Parcel Service expects 40 of its delivery vehicles to run on alternative fuel by 2025.

Using their own routing technology for urban and suburban deliveries, these small but rapidly growing startups must scale up while also keeping prices low in a competitive market, which could also make them acquisition targets.

Nobody wants to pay more for sustainable delivery, said Niklas Tauch, CEO of Berlinbased Liefergrun, which delivers in big cities across Germany and Austria and lists fashion retailers HM and Inditex, and Hello Fresh…