Uber is considering upping its investment in a different kind of transportation.
TheInformation.com reports that the ridesharing company is in talks to invest $170 million into electric scooter maker Lime with an acquisition option. The talks come at a time when Lime’s business has ground to a halt amid the pandemic.
In a letter to employees on April 30, Lime CEO Brad Bao said he was forced to lay off 80 employees, or 13 percent of its staff, due to the impact of COVID-19 on the business.
“Almost overnight, our company went from being on the eve of accomplishing an unprecedented milestone, the first next-generation micromobility company to reach profitability, to one where we had to pause operations in 99 percent of our markets worldwide to support cities’ efforts at social distancing,” he wrote.
But Lime had troubles even before the pandemic. In January, PYMNTS reported that the company had laid off 14 percent of its workforce (around 100 people) and ceased operations in a dozen markets to save money.
If the deal proceeds, the investment would value Lime at $510 million, the news service reported. That’s a dramatic drop from its $2.4 billion valuation following the company’s last venture capital round of $310 million in 2019.
Uber is already a Lime investor along with Alphabet Inc., GV, Bain Capital, Andreessen Horowitz, Fidelity Ventures and IVP.
After Uber and Lyft took off, electric scooters were considered the next big thing, The Information reported. It’s a crowded niche with competitors that include Ofo, Bird, nextbike, Zagster, Mobike, Spin, Motivate, Razor and Skip.
The report said Uber has been rumored to be considering an acquisition in the bike industry for two years, and was said to be in talks to acquire Lime and its rival, Bird Rides Inc.
Lime President Joseph Kraus has said the company was not looking to sell, but has suggested that Lime may be interested in acquiring a competitor.