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Have we already reached peak micromobility?

A critical juncture for micromobility has arrived. The astronomical growth in VC activity has slowed, with deal count and value currently on pace to hit three-year lows.

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Regulation. Safety. Vigilantes.

These are but some of the headline-grabbing issues that have partly defined the meteoric rise of the micromobility industry over the past few years. And yet, amid all the e-bike-and-scooter drama and divisiveness, as the landscape of urban transportation shifted to two wheels, there was always an increasing flow of venture capital funding.

But now a critical juncture for micromobility has arrived. The astronomical growth in VC activity has slowed, with deal count and value through June on pace to hit three-year lows, according to PitchBook’s latest Emerging Tech Research report on mobility tech.

“We believe this data shows that micromobility has become a more mature industry with clear leaders such as Bird and Lime dominating the market,” said Asad Hussain, an emerging tech analyst at PitchBook. “Although the maturity of the market may make it more difficult for new entrants to compete, we have a positive outlook on later-stage leaders in the space such as Bird and Lime, which have capital and scale advantages that should enable them to succeed. We also see investment opportunity in early-stage technology enablers, such as fleet management providers and advanced positioning tools.”

Indeed, Bird and Lime have benefited most from the flood of capital. Led by former Uber and Lyft executive Travis VanderZanden, Bird set a new standard for skyrocketing valuations:

• June 2017: $3M seed | $18M post-valuation
• Feb. 2018: $15M Series A | $60M
• March 2018: $100M Series B | $400M
• June 2018: $150M Series C | $1B
• Jan. 2019: $158M Series C1 | $2.1B

Lime, which started with e-bike rentals before entering the scooter scene, also accelerated from zero to $2 billion-plus at breakneck speed; founded by Brad Bao and Toby Sun in early 2017, the company hit a $2.4 billion valuation with a $310 million Series D in July.

And yet, even for the biggest and well-funded giants in the space, difficult questions persist:

How will this young, untested industry fare in the case of an economic downturn?

How are the unit economics improving with the newer generations of e-scooters?

When does profitability become realistic?

Even veering away from finance-related concerns, there’s plenty to worry about related to safety and regulation. Injuries—even deaths—are ticking up in a world of high speeds in high-traffic areas, and it’s practically impossible to mandate the use of helmets or proper riding methods.

Elsewhere, the constant littering of unused scooters on sidewalks, walkways and store entrances has led vigilante businesses to impound scooters and even charge companies to get them back. Over the years, notable cities to have banned scooters altogether include San Francisco, Philadelphia and Boston.

“We think the regulatory landscape for micromobility is moving in the right direction,” Hussain said, “but we still see uncertainty casting a cloud over the future of the industry.”

Bird, Lime and scooter rival Skip are hoping to fight through that cloud as they’re all currently on the fundraising trail, according to a recent report from The New York Times.

Those rounds no doubt would significantly bolster the year’s capital invested total. Though the days of booming valuation gains in micromobility—along with a growing overall deal count—might be gone.

Featured image via skyNet/iStock/Getty Images Plus

For more insights into the micromobility industry and the rest of broader mobility tech, be sure to check out the new Emerging Tech Research report.

  • joshheadshot.png
    Written by Joshua Mayers

    Joshua Mayers is a content strategist for PitchBook’s Institutional Research Group. He previously served as managing editor of the PitchBook News team, where he oversaw production of PitchBook’s daily newsletter and website, News & Analysis. Before that, Josh worked nine years in the sports department of The Seattle Times, covering the Seattle Sounders of Major League Soccer for four-plus seasons.

    Born in Jerusalem, Josh grew up in Bellingham, WA, and studied journalism at the University of Washington. Most of his “free” time is spent chasing after his three young daughters.

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