When scooter startup Bird acquired scooter startup Scoot back in June, we got the first hints of consolidation within the two-wheeled mobility industry. The deal closed for roughly $25 million, and reminded all of us that it’s expensive to have a scooter startup. And logistics aren’t a (cough) legal walk in the park, either.
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Two bits of recent news show that the consolidation has continued, but not exactly in terms as ideal as a scoop or buy.
First up, months after the aforementioned acquisition, Bird has laid off less than two dozen ex-Scoot employees, according to the San Francisco Chronicle. This is Bird’s second wave of layoffs this year. The layoffs impacted salaried, technical workers, according to TechCrunch.
Next up is Unicorn, a scooter startup co-founded by a co-creator of the popular tracking system Tile. The company has shut down operations, according to The Verge. This is leaving the roughly 350 orders of Unicorn scooters unfulfilled. Customers will be scooter-less, and refundless.
The startup pointed to overspending on advertising and marketing as the reason for its demise. In an email obtained by The Verge, Unicorn’s CEO Nick Evans pointed to the price tag of Facebook ads as the home for a “large portion of revenue.”
Evans also cited cold weather and a struggle for customer acquisition.
“Unfortunately, the cost of the ads were just too expensive to build a sustainable business. And as the weather continued to get colder throughout the US and more scooters from other companies came on to the market, it became harder and harder to sell Unicorns, leading to a higher cost for ads and fewer customers,” he wrote, according to The Verge.
Back in October, our former EIC Alex Wilhelm wrote that while the scooter boom has proven popular with consumers and investors alike, most scooter companies are “far from having a sustainable business model.” Besides these layoffs, we’ve reported on the staggering amount of losses reported by the likes of Lime and Bird. What does this tell us? That popularity doesn’t always equal profitability, or even viability.
Illustration: Li-Anne Dias