Netherlands-headquartered electric scooter rental service Dott and US-based e-scooter producer Superpedestrian both raised significant amounts in corporate-backed round this week, indicating the sector is rebounding from the covid-19 pandemic.
Dott, the operator of an app-based e-scooter and e-bike rental service spanning 36 cities across nine European countries, added $70m to a series B equity and debt round now totalling $155m, with Prosus Ventures, the venture capital arm of internet group Prosus, part of the extension.
Abrdn led the second close, which included Sofina and EQT Ventures, both having joined Prosus Ventures, Estari, Aberdeen Standard Investments, Expon Capital, Felix Capital, FJ Labs, McRock Capital, Invest-NL, Quadia and various individuals in the round’s April 2021 first tranche.
Superpedestrian is the developer of a smart scooter known as the Link, which forms the basis of its own e-scooter rental service that stretches across 57 cities in North America or Europe.
The company completed a $125m debt and equity round featuring consumer electronics producer Sony’s Innovation Fund, financial services firm Citi’s Impact Fund, investment bank Jeffries, Antara Capital, FM Capital, Spark Capital and General Catalyst.
Both Superpedestrian and Dott said in their funding announcements they intend to channel the cash into expansion. In addition to moving into new cities, Dott will increase the size of its e-bike fleet and spend money on product development activities.
The Superpedestrian funding will also be used for R&D and geographical expansion, but the company will additionally allocate capital to the deployment of its internally developed Pedestrian Defense safety system into its scooters.
While several digital-first sectors experienced considerable growth during the coronavirus pandemic, physical services such as micromobility were less successful.
Although e-scooters were not hit as hard as ride hailing apps such as Uber or Lyft, concerns about germ transfer did lead to a slowdown in customer growth, with many operators cutting staff numbers in the first half of 2020 along with services while attempting to increase sanitisation among their fleets
However, the slowdown appears to have been a minor blip, with several operators having closed large rounds in recent months.
Lime raised $523m in November 2021, just weeks after Tier Mobility secured $200m at a $2bn valuation. Bird on the other hand agreed a $2.3bn reverse merger in May 2021 and is set to list on the New York Stock Exchange.
A big issue in the market has been a preponderance of competitors crowding each other out in certain cities. This has been alleviated somewhat by consolidation – Lime having bought Jump and Bird acquiring Scoot Networks – but external competitors with larger pockets such as Uber and Bolt have also launched their own services as they look to diversify.
Competition is likely to remain the pressing issue in future, as it was in the once rapidly expanding bicycle rental market, but several participants remain well capitalised and the need for low-emission micromobility options in urban areas should ensure there will be a future for some.
Meredith Shields, head of Citi Impact Fund, expressed that view this week, explaining: “In the last two years, infrastructure challenges and lack of equitable access to transit options in both urban and suburban communities across the US have underscored the need for developing safe, reliable transportation options for all.
“Superpedestrian is doing just that by developing innovative, sustainable technology that reimagines the future of cities through improved connectivity.”
Photo courtesy of Dott.
