eResearch | E-scooters have entered the ride-sharing ecosystem and the industry has raised almost US$1.5 billion in private capital as e-scooter companies such as Neutron Holdings, Inc, which operates under the name Lime, and Bird Rides, Inc., were each valued at over US$2 billion during their latest rounds.
E-scooter companies provide GPS enabled e-scooters across a city, which users can rent for a short period by downloading a smartphone application. The e-scooters are generally “dockless”, without a fixed charging station, which means service providers must either actively charge and drop off e-scooters in specific locations or have a drop off charging station setup.
According to Goldman Sachs, the ride-sharing market is estimated to grow between US$177 billion to US$492 billion byp 2030. Grandview Research did a study on the e-scooter market and valued it at US$17.43 billion in 2018 with forecasted CAGR of 8.5% to US$41.9 billion by 2030.
Numerous jurisdictions have already started to pilot e-scooter projects to get feedback from users, civilians, and businesses, and there is a clear divergence in the acceptance of the new ride-sharing ecosystem.
In July 2019, Milwaukee, U.S., implemented a pilot project with Lime but just after recording 25,000 rides in its first week, Mayor Tom Barrett froze the program, denying any new licenses and rejecting Lime’s request to include an additional 500 e-scooters to its fleet. The freeze came after more than a hundred complaints from civilians such as elderly people and pet owners who had safety concerns with e-scooters zooming by them on the sidewalks.
In contrast to Milwaukee’s entrance to the e-scooter ecosystem, in July 2019, Calgary, Canada, launched a successful pilot project with 1,500 e-scooters from Lime and Bird, which ended up with over 100,000 rides in just the first two weeks compared with when the Province launched e-bikes which took six months to achieve the same feat.
As multiple private e-scooter companies continue to raise private placements, OJO Electric LLC, a company that develops and provides e-scooters for the industry, may become one of the first public companies in the industry as it announced on July 9, 2019 that it will acquire Arcturus Ventures Inc. (TSXV: AHZ) in a reverse take-over.
OJO will trade on the TSX venture exchange under the ticker OJO with a US$38.1 million pro forma market capitalization. There will be approximately 65.8 million shares outstanding with 9 million subscription receipts distributed for a brokered private placement of US$5.2 million in proceeds at a price of US$0.59 per share.
Canada’s provinces continue preparations to service e-scooters within their cities, with Montreal expected to have e-scooters this month, Edmonton committee announcing a recommendation on May 21, 2019 to allow e-scooters, and Ottawa council passing a motion in April 2019 to start research on e-scooter regulation.
As governments receive mixed feedback from pilot projects, companies such as Lime are implementing educational initiatives to teach users about safe e-scooter riding and regulations regarding where they can ride. Investors continue to watch new implementations and government reactions for viability of the new mode of transportation in the ride-sharing economy.
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Neutron Holdings, Inc. (private company)
Headquartered in California, U.S., Neutron is a private transportation company that operates in the e-scooter sharing business through its brand name Lime, formally known as LimeBike, which offers dock-free bikes and e-scooters through its smartphone app. Neutron was founded in 2017 and in Feb 2019 raised US$310 million at a post-money valuation of US$2.4 billion, with investors including Alphabet (NASDAQ: GOOG), Andreessen Horowitz LLC, and Bain Capital Ventures.
Bird Rides, Inc. (private company)
Headquartered in California, U.S., Bird is a private electric vehicle sharing company focused on providing e-scooters through its smartphone app. Bird was founded in 2017 and in Jun 2018 raised US$300 million at a post-money valuation of US$2 billion, with investors including Accel, Charles River Ventures and Sequoia Capital.
OJO Electric LLC (TSXV: OJO)
Headquartered in California, U.S., OJO is a private e-scooter development company that partners up with ride-sharing companies to provide e-scooters for their services. It offers e-scooters with various functions including e-scooters that can drive in sitting and standing positions, as well as e-scooters with accessories such as battery chargers and baskets. On July 9, 2019, OJO announced a reverse-takeover with Arcturus Ventures Inc. (TSXV: AHZ) with a US$38.1 million pro forma market cap, and is expected to trade under the ticker OJO on the TSX venture exchange.
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