With Lime partnership, Uber scooters are on the way

July 9, 2018

In venture capital land, it seems like there’s not a day that goes by without scooter news. The latest: Uber has participated in Lime’s $335 million financing led by GV. The round values the bike and scooter-sharing startup at $1.1 billion, the company independently confirmed to PitchBook.

With the deal, Uber will roll Lime's scooter offerings into its app and co-brand Lime's existing fleet of electric scooters. And as for Lime's bikes—the company's original service and the reason it was initially named "LimeBike"—they won't be available in the Uber app, presumably because of the ridehailing giant's recent acquisition of JUMP Bikes, which it bought for a reported $200 million in April. 

Including its latest round, Lime has raised $467 million in equity funding. That includes its inaugural $12 million round last year and a $120 million Series B, which closed in February. Since it launched its services in mid-2017, the company has expanded its portfolio of transportation options to include electric-assist bikes and e-scooters. It has also moved overseas, placing its bikes in Europe at the end of last year, followed by scooters in June.

GV's Joe Kraus will join Lime's board. IVP, Atomico, Fidelity Management, Andreessen Horowitz, Coatue Management, Fifth Wall Ventures and GIC also participated in the funding, as did GV's parent company, Alphabet, which is also an investor in both Uber and Lyft.

Consolidation afoot in the mobility sector


The Uber-JUMP deal was the first M&A transaction for the ridehailing company since Dara Khosrowshahi was named CEO in August 2017, per the PitchBook Platform. And it looks like Uber's chief may have more acquisitions up his sleeve, with rumors surfacing recently that the business is considering picking up Middle Eastern ridehailing company Careem.

Uber's investment in Lime, the size of which the company declined to disclose, could be a sign of the company's long-term interest in the startup as well as a confirmation of its expansion into multi-modal transportation options.

The Lime and JUMP deals come amid a pickup in M&A activity by Uber's competitors. Earlier this month, Lyft announced an agreement to acquire Motivate, a bikesharing platform that operates Citi Bike in New York, Blue Bikes in Boston and other similar services. Lyft wrote in a statement that bikesharing is "a natural extension of Lyft's core approach to improving transportation access and building community through offerings such as shared rides and the integration of public transit in our app."

As for scooters, Uber and Lyft are among the companies that have submitted paperwork to San Francisco officials indicating their interest in obtaining a permit to launch electric scooters in the city. On top of that, TechCrunch discovered in June that Lyft had added a feature allowing users to search a map for last-mile vehicles and scan a QR code or enter a pin to unlock a scooter. 

  HQ Total raised Current valuation Select investors  
Beijing $1.6B $3B* Didi Chuxing, Ant Financial View profile
Santa Monica, CA $418M $2B Sequoia, Index Ventures View profile
San Mateo, CA $467M $1.1B Uber, GV, Alphabet View profile
San Francisco $31.1M $75M Accel, Menlo Ventures  
San Francisco $8M $43.2M Grishin Robotics View profile
San Francisco $4.3M $12.3M Scout Ventures, Vision Ridge Capital View profile

*valuation unconfirmed

In China, bikeshare provider Mobike was acquired by Meituan Dianping in April for a reported $2.7 billion. The price tag makes it one of the largest, if not the largest, exit in the bikesharing space to date. Mobike’s key competitor Ofo, which is active in the US, is still a free agent, though it’s backed heavily by Didi Chuxing, the ridehailing company that has a rivalry with Meituan. Didi has already started offering Ofo bicycles via its platform. 

Meanwhile, Bird, another scooter company, is jacking up its valuation in record time. Investors are likely optimistic that the company will see a successful exit. But who could be the acquirer? With Uber and Lime establishing a relationship, a Lyft-Bird romance seems natural. 

But Uber's valuation is more than 60x that of Lime's, while Lyft is only about 7x more valuable than Bird. A Lyft-Bird deal would be pricey. Bird’s valuation clocked in at $2 billion as of the end of June and the ridehailing company’s M&A history doesn’t exactly suggest it’s keen to shell out that kind of cash. It doesn’t help the acquisition case that Travis VanderZanden, the founder of Bird, is also a former employee of both Uber and Lyft. And VanderZanden didn’t depart from the latter on the best of terms, with Lyft filing a breach of confidentiality lawsuit against him.

For Lyft, Uber and Didi Chuxing, it was only a matter of time before they began to dabble in the bike and scooter sector. After all, multiple mobility options will only create greater stickiness for their respective platforms and it takes all of a few seconds for the savvy millennial to calculate that they could scoot the same distance for pennies on the dollar that they're paying a driver for the same ride.

And as the table above shows, the bike/scooter sharing industry remains ripe for further consolidation amid red-hot investor interest and a scramble for market share.

A roundup of recent scooter content

Spin is closing in on a $125M security token offering. We spoke to the company's co-founder Euwyn Poon earlier this year about why it's pivoting to crypto.

Scooters have gone global, with Lime launching a fleet of e-scooters in Paris in June .

A few weeks ago, Bird confirmed a $300 million Sequoia-led financing that values it at a whopping $2 billion. Bird was valued at $400 million as recently as April. 

A look at Ofo's expansion into the scooter sector.
 

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