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Electric Scooter Startup Bird Raises $275 Million in Latest Funding Round

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【Summary】Bird is emerging as a leader in micro-mobility space. On Thursday, the company announced a $275 million Series D funding round. The round was led by CDPQ and Silicon Valley-based Sequoia Capital. The latest round values Bird at a $2.5 billion pre-money valuation.

Eric Walz    Oct 04, 2019 8:50 AM PT
Electric Scooter Startup Bird Raises $275 Million in Latest Funding Round
Bird's shared electric scooters are a familiar sight in many cities.

The largest growth in the micro-mobility craze occurred over the past year, with electric scooter-sharing startups deploying fleets of scooters in cities around the world, often to the dismay of local residents who must content with people riding them on sidewalks and streets, as well as idle scooters cluttering some neighborhoods. 

Despite the protests, hundreds of million dollars in venture capital is flowing to micro-mobility startups, many of these newcomers are a long way from profitability, with the exception of Santa Monica, California-based Bird, who is working to make electric scooter sharing a sustainable business model.

Bird is emerging as a leader in micro-mobility space. On Thursday, the company announced a $275 million Series D funding round. The round was led by CDPQ and Silicon Valley-based Sequoia Capital. The latest round values Bird at a $2.5 billion pre-money valuation, according to sources familiar with the transaction.

Bird scooters offer a more efficient and fun way to get around in cities, while reducing the number of cars on the road, which is the force driving innovations in micro-mobility. 

The company operates fleets of shared electric scooters in cities that can be located and unlocked with a smartphone app. Bird charges users a flat fee to unlock the scooter and a per minute charge to ride. At the end of the trip, riders can leave the scooters at their destination.

Bird's leading position in the scooters wars was bolstered by its intentional shift from rapid and expensive growth to creating industry leading positive unit economics, in order to build a sustainable business. The company said the new funding will help Bird continue on its path towards profitability and ongoing vehicle research and development.

Bird's custom designed and thoughtfully engineered electric mobility options play a pivotal role in its unit economics, according to the company. Bird is focusing on how much revenue each scooter can generate rather than having the most electric scooters in cities and the highest visibility.

"Nearly a year ago, we recognized that the world was changing. Gone are the days when top line growth was the leading KPI for emerging companies. Positive unit economics is the new goal line," said Travis VanderZanden, founder and CEO of Bird. "As a result, we pivoted from growth to unit economics as the top priority for the company. Now with the best unit economics in the industry, new Bird investors such as CDPQ see that we are paving the road for a long term sustainable and healthy business."

Bird recently announced its "Bird Platform" for businesses. Bird will sell its vehicles at cost to all independent operators participating on the platform. Operators will be able to brand the scooters with a custom logo and run their own cooter sharing service through the Bird app. Scooters are delivered to business customers map-ready, equipped with GPS, anti-theft technology, and government technology. In exchange, Bird takes a small fee for each ride.

The company is also introducing new models with a longer service life. Bird's first electric scooter the Bird Zero had a lifespan of only 12 months, and many didn't even last that long in the real world. 

Less than a year after introducing its first scooter, the company unveiled the "Bird One", its next generation e-scooter. The Bird One was built beefier and more durable for the shared micro-mobility market. Following that was the Bird Two, which is available for riders in Los Angeles.

BirdTwo_1.jpg

The "Bird Two" electric scooters are more durable for ride-sharing.

Bird is competing with Lime, Scoot, Spin, Jump and other newcomers in the micro-mobility space. Ride-hailing giant recently Uber purchased Jump for a reported $200 million after seeing the potential of adding electric scooter options to its ride-hailing app.

"Bird fits directly within our strategy to invest in innovative and disruptive tech sectors such as sustainable mobility," said Jeffrey R Smith, Senior Managing Director, Digital Investment Strategy, CDPQ. "This new partnership also supports our commitment to take part in the transition toward a less carbon-intensive global economy. We look forward to continue building a business which provides innovative micro-mobility solutions in cities around the world."

Bird and its rivals have meet resistance as well. Injuries as a result of the scooter accidents have led some cities to draft legislation ban them outright. A recent Consumer Reports investigation showed that 8 deaths were the result of e-scooter accidents since 2017, with another 1,500 reported injuries.

Bird, along with other electric scooter startups, requires riders to sign a waiver acknowledging that they need to wear a helmet before being able to ride. However, many people ignore the warning.

In the past Bird offered free helmets to riders, often passing them out at various promotional events. Riders can visit Bird's website and request to receive a helmet, as long as they are a registered customer on the platform.

For those wary of riding a stand-up electric scooter in a urban area, Bird recently unveiled its Bird Cruiser, one of the few seated electric vehicles that resembles a small bicycle or moped with an electric motor that doesn't require pedaling. The Cruiser can fit two people.

Bird_Cruiser_Home.0.jpg

The Bird Cruiser electric moped/bike

Bird currently operates in over 100 globals cities, including Los Angles, Atlanta, San Jose, Paris, Stockholm and London. In August, Bird launched in Germany.


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