In the late 2010s, micromobility was the kind of buzzword that could drive a start rush and billions of dollars in funding. But the useless model of buying scooters and electric bikes and renting them out began to take hold even before the pandemic hit the poleax sector. A move to public markets comes too late for hype.
Consolidation means two U.S. companies lead the group: Bird and Lime. Santa Monica start-up Bird announced last year via a Spac that the company valued at $ 2.3 billion. Shares have since fallen by more than a third. Unsurprisingly, Lime is preparing to be announced this year.
Expect Lime to point out that it has a much larger fleet than its rival. Yet it has expanded in unfortunate circumstances. In 2020, amid a pandemic crisis in customer numbers and workforce retrenchments, Uber has a $ 170 million investment in the company that included the transfer of its own loss-making bicycle and scooter business Jump.
At a reported $ 510 million, the investment lowered Lime’s valuation by about three-quarters.
As with Airbnb, which also completed a roundup in 2020, Lime had little choice. It can expect a much higher market value. The question is whether renting e-bikes and scooters can be profitable in everyday circumstances. Bird’s finances do not look promising. Sales in 2021 compare favorably with the 2020 restrictions. But the company still lost $ 37 million on $ 65 million in revenue in the last quarter. It comes after trying to reduce losses by with partners to drive his vehicles.
Lime claims it has been profitable on an adjusted ebitda basis in the last quarter. But it also remains loss-making. Last year, it raised $ 418 million in convertible debt from investors, including the Abu Dhabi Growth Fund and a $ 105 million senior secured term loan facility. More cities are choosing to support micromobility providers and the company is advocating expansion plans. But until it breaks even, funding will be needed just to keep daily operations on track.