Ridesharing

Lime, Bird Raise Money At Lower Valuations

Lime and Bird, the two electric scooter startups that raised hundreds of millions of dollars in funding in 2018, are aiming to raise more but at a lower valuation.

Bloomberg, citing multiple people familiar with the details, reported the two companies are looking to raise hundreds of millions of dollars more at about a valuation of $2 billion. That is under the $3 billion or higher valuations they were fetching in years past. Bloomberg noted that the two startups are the youngest to reach unicorn status, which means they have a valuation of more than $1 billion. But with the lower valuations, it appears that business is starting to fray. Lime is reportedly raising $300 million at a valuation of around $2 billion. The round could expand to $400 million, noted Bloomberg. Meanwhile, Bird is raising $300 million, with a valuation of $2 billion, which is unchanged from last year. Fidelity Investments participated in the round for Bird.

According to Bloomberg, with the weather getting colder, bad conditions have stopped riders from using the scooters. That has prompted Lime and Bird to move scooters to areas with warmer climates. At the same time, cities have started to limit the number of scooters on the streets, which is also hurting business. There’s also increased competition as more players enter the market. That gives investors more choice and more leeway in lowering the valuations.

Bloomberg noted that the competition is getting fiercer since Uber Technologies may get into the market. People familiar with Uber’s plans told Bloomberg that the company is looking at rolling out an electric moped pilot at some point in 2019. Mopeds are faster than scooters and can be used in long-distance trips. It also requires the user to have a license. For Uber, entering the scooter market is also a way for it to show investors ahead of its expected initial public offering this year that it is getting in on all the trends in transit.  With all the competition, industry watchers told Bloomberg that consolidation in the scooter industry is bound to happen. No deals have come to fruition yet, but Bloomberg reported Lime and Bird have held discussions with Uber about deals.

 

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