Winter is coming. It’s time for scooter startups to find a cozy, protective blanket to get through the cold months.
For lime And Bird, which could be Uber. . The pair of venture capital darlings, who operate fleets of electric scooters around the world, are said to be in talks with the SoftBank-backed riding giant about a possible acquisition, as The Information first reported.
The news follows Lyft’s acquisition of the Motivate bike rental service, Ford’s acquisition of springless motorcycles and the Spin e-scooter, and Uber’s acquisition of JUMP Bikes. The trio of transactions is likely the first of many deals, as M&A activity in the scooter industry will inevitably heat up in the coming months.
Uber, which has scooters available for rent within its mobile app in Los Angeles and Austin, courtesy of JUMP, is looking to one of the two startups to beef up its supply of scooters, though both companies are denying reports of an impending deal. . Bird CEO Travis VanderZanden told TechCrunch simply that “Bird it’s not for sale. “Meanwhile, a Lime spokesperson told us that they are” focused on creating an independent company “or, in other words,” Lime is not interested in the Uber courtship. “
Uber declined to comment.
Scooter startups aren’t cheap
An acquisition of Lime or Bird would be quite expensive. Both companies are worth more than $ 1 billion and would surely raise their valuations amid M&A talks, especially considering reports that both are currently fundraising with even higher valuations. Bird, meanwhile, was valued at $ 2 billion this summer and Lime boasts at least a price tag of $ 1.1 billion. However, Uber already has a minority stake in Lime, which would make that deal a bit cheaper.
An Uber acquisition would surely satisfy its investors, but I’d bet neither Lime nor the Bird founders are willing to give up their independence. Both startups have been working tirelessly to build sustainable businesses and expand beyond bikes and scooters. Bird recently launched the Bird Platform, an exciting new service that allows entrepreneurs to purchase Bird’s scooters at a cost and rent them themselves as a side business.
Lime, a couple of weeks earlier, launched its first fleet of “LimePods,” shareable vehicles that are now available to rent through the Lime app in Seattle, and is working on launching a line of brick and mortar facades in major US and international cities. On top of that, both companies have been racing to tackle new markets around the world, from Sydney to London, in 2018.
Together, the two companies have raised nearly $ 1 billion in venture capital funding in about a year. Like the two leading brands, they are rapidly making e-scootering an acceptable last-mile mode of transportation in the United States. Their recent behavior suggests that companies are looking to a future in which they are a multimodal transportation platform, like Uber, rather than the affiliate of one.
Investors, however, have a different perspective. Sources tell TechCrunch that some of Lime and Bird’s supporters are encouraging the companies to continue talks with Uber. Despite being extremely young companies, some of the youngest to accumulate such high valuations in history, Lime and Bird are expensive, severely limiting their exit options. Lime is backed by GV, IVP, Coatue Management, GGV Capital and others. Bird is backed by investors like Accel, CRV, Greycroft, Sound Ventures, and Upfront Ventures.
What does Uber want?
When Uber shelled out $ 200 million to acquire JUMP Bikes earlier this year and made dockless motorcycles and scooters profitable in select cities, it became apparent that the roadside behemoth was doubling down on micro mobility.
“We see the Uber app moving as it’s just about carpooling and calling a car, to really help the consumer get from A to B in the most affordable, most reliable and most convenient way,” he said. Dara Khosrowshahi, Uber CEO, to TechCrunch’s Megan Rose Dickey at the time of the deal. “We think electric bikes are a spectacularly cool product.”
He added that he had been looking at e-scooters “curiously on the streets” and thought they were in a “strange place” due to regulatory problems. Well, the latter is still true in many cities, but scooters have certainly become more widely accepted as they invade the neighborhoods of Seattle, San Francisco, Denver, Austin, Paris, and beyond.
Now that Uber is serious about scooters, it needs to increase its offering. Lime, given Uber’s existing stake in the company and its lower valuation, is a natural target.
Of course, there are many, many, many other small e-scooter operators that Uber could target, such as Skip, Scoot, and Grin, to name a few. Spin, one of the first entrants in the e-scooter market, however, is no longer an option. The startup had raised about $ 8 million in venture funding and was sold to Ford for about $ 100 million in a deal confirmed a few weeks ago.
Uber is expected to go public in early 2019. The company released its third-quarter financial results last month, reporting a five percent quarter-over-quarter revenue increase at $ 2.95 billion, an increase. 38 percent year over year. Gross bookings increased six percent in the quarter and 34 percent year-over-year to $ 12.7 billion. However, net losses increased 32 percent in the quarter compared to $ 939 million on a pro forma basis.
The company says it is investing heavily in Uber Eats, its bikes and scooters, and Uber Freight, as it expects each of those efforts to become even bigger contributors to its overall business.
Uber is likely to make a move on Lime in the first quarter of 2019, before the company closes another round of fundraising and prices themselves higher than Uber would be willing to pay.