The year of the coronavirus pandemic hasn’t been great for providers of e-scooters, as consumers now have fewer places to go. More of us are working from home, many leisure-time venues are closed, and there are far fewer social gatherings.
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On the other hand, the last few months haven’t been a disaster for these companies either. Scooters do provide a naturally socially distanced form of short-distance transport. They’re still useful for getting to essential jobs, running errands, or cruising around the neighborhood.
That mixed-bag picture may be why e-scooter companies, which captivated our attention in 2018 and 2019 with their ultrafast, massive scaling and mega-sized funding rounds, haven’t been so top of mind lately. Overall, the cohort is hanging in there, still raising investments and renting scooters. But 2020 has not featured the same consistent hypergrowth as years past.
Lime’s 2020 story
To get an idea of how recent months have been for the industry, Crunchbase News checked in with Andrea Ellis, CFO of the largest e-scooter provider, Lime. Founded in early 2017, San Francisco-based Lime started out in dockless bike rentals, but pivoted to focus primarily on scooters a year later.
In its four-year history, Lime has raised a whopping $935 million in known venture funding, with Google’s GV, Andreessen Horowitz and Bain Capital among its lead backers. As of September 2019, less than three years after its founding, Lime was operating in more than 120 cities across more than 30 countries.
The jaw-dropping pace of expansion did not last. In January, the company laid off approximately 14 percent of its workforce and ended scooter rental services in a dozen markets. In April, as nations across the globe enacted shutdowns to restrict the spread of COVID-19, Lime paused operations in virtually all its markets and laid off another 13 percent of staff.
Fast-forward to year-end, and Lime is looking at a changed, but potentially more welcoming environment for its last-mile transport offerings.
“I would say COVID has been incredibly transformative for micromobility,” said Ellis. For cities surveying their public transit options, there’s a renewed appreciation for “open-air single passenger forms of transportation.”
The company had its “best quarter ever” in Q3, Ellis said, noting that Lime was EBITDA-positive as well as free cash flow-positive. It’s currently offering scooters in 120 cities across 28 countries, along with ebikes in 25 markets.
Amid the pandemic, Ellis said, Lime has seen a shift in its three primary usage areas: commuters, tourism and intracity travel. Working from home has impacted commuting, and tourism is also down. However, the company is seeing more use for intracity transportation, such as running errands in the neighborhood, as well as uptake from essential workers making commutes.
It appears major cities are also accelerating work on programs to better incorporate scooters into their transit mix, Ellis said, pointing to New York and London as prime examples.
Last month the city of London announced plans for a 12-month trial of rental e-scooters in the capital in an effort to “enable people to use greener forms of transport.” A few weeks earlier, New York City released its request for applicants for a citywide electric scooter demonstration project.
“These are two markets where micromobility may not have been on the agenda for this year or next year,” Ellis said. “Now they’re moving quickly on launching micromobility programs.”
Ride totals, meanwhile, are growing faster. In October, Lime surpassed 200 million total rides to date. It took half the time to achieve the second 100 million as the first 100 million, Ellis said.
Micromobility funding tops $1B in 2020
While funding for scooter-focused businesses is down in 2020 compared to 2019, there are still a number of large rounds getting done. Lime itself raised a $170 million investment led by Uber in May, a down round that helped it power through the pandemic.
Others that have raised large rounds include:
- Tier Mobility, a Berlin-based electric scooter startup, raised a $250 million Series C round in November.
- Bolt, an Estonia-based ride-hailing and scooter micromobility platform, raised $182 million in a December Series D round.
- Voi Technology, a Stockholm-based startup offering electric scooters in European cities, raised $160 million in a December Series C round.
Altogether, at least 28 companies in the micromobility space raised investments of $2 million or more in 2020, per Crunchbase data. In total, they raised just over $1 billion this year.
Scooting to exit
While there are dozens of funded e-scooter companies out there, it’s a phenomenon that’s to date been relegated to private markets.
If e-scooter growth trajectories resume as hoped once the pandemic recedes, we might expect to see a prominent company or two in the space eye the public markets, either through an IPO or a SPAC deal.
It could happen quite soon. One of the first entrants in the space, Santa Monica, California-based Bird, is reportedly in talks about striking a deal with a blank-check company as a path to go public.
At Lime, however, Ellis doesn’t envision a market debut as a near-term possibility.
“The biggest rationale in my mind for going public is access to capital,” she said “From our standpoint, we have sufficient cash on hand to execute our plan.”
Illustration: Dom Guzman
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