E-Scooter Start-Up Bird Is Rumored to Be Receiving $300 Million in Funding
E-Scooter Difficulties and Success in 2018 and How Bird Will Deal with Them as the New Year Begins
On January 9, 2018, Bird, an electric scooter startup, is rumored to be extending Series C funding with an extra $300 million dollars that will be provided by the crossover investor known as Fidelity. Bird has neither confirmed or denied these rumors, but these claims originate from an Axios article. Bird and Fidelity haven’t worked together before, meaning there have been no past investments from Fidelity. The rumored investment is using a valuation of $2 billion, that Bird acquired through previous financing of $300 million from Sequoia-led sources. Currently, Bird has funded approximately $400 million through venture capital as of today’s date; The funding has been received from investors such as Accel, Greycroft, CRV, Upfront Ventures, Index Ventures, Tusk Ventures and Craft Ventures.
Bird could be receiving this investment at a crucial time, as current investors are starting to lose heart in scooter companies’ claims of being the end-all-be-all solution to the issue of last-mile transit. Investors are losing faith in these companies primarily because of scooter startups having issues with their products being generally faulty, notably with unreliable batteries, and practicing lack-luster unit economics. Bird’s current and biggest e-scooter rival, Lime, is fighting these claims against electric scooter companies by releasing new products such as normal scooters, bikes and what they call LimePods. LimePods are shareable vehicles, which have been recognized as 2018 Fiat 500s, that they plan to offer with accessibility similar to that of their bikes and scooters; The initial introduction of this service will offer 50 cars and is only available in Seattle, but Lime has plans to expand inventory and availability later on. Renting a LimePod currently costs a base fee of $1 with a rate of 40 cents per each minute of use by a driver. Investors do seem interested in these developments and Lime is currently seeking a $400 million investment with a $3 billion estimate. Securing this investment may prove difficult as their estimate is triple of a valuation it received from Uber’s investment of $335 million.
Investors have funneled hundreds of millions of dollars into electric scooter companies for the past two years and some publications have claimed that 2018 was the year to invest in electric scooters. However, these transit companies are also engaged in fierce competition to come out on top. The notable contenders of this feud are the aforementioned Bird and Lime, as well as Spin. Lime seems to be narrowly beating Bird as of January 12, 2018 with $467 million dollars in funding compared to Bird’s $415 million. Spin is significantly behind, with only $8 million in reported funding, however it was acquired by Ford in November, 2018 for a deal that with an estimated worth of $100 million. Both Lime and Spin originally started as bike-sharing companies, but have since shifted to other vehicles like e-scooters, although Lime is expanding their market for ride-sharing with other vehicles; On the other-hand, Bird is recognized as the first to leap into the e-scooter market and boasts a total of 10 million rides with approximately 2 million individual riders. The competition between Bird and Lime is insanely close, but if the rumor of Fidelity providing Bird with $300 million in funding is true, Bird could get a significant lead. Other companies in the market of e-scooters include Skip, Scoot, Tier, Dott and Grin, but they have received very little funding compared to competitors.
Bird is also now running into issues on the legal end that could impact future investments. Firstly, Boing Boing published an article about Bird vehicles being illegally parked, being impounded and how to convert impounded Bird scooters for $30 into personal scooters without restrictions by utilizing a conversion kit. Bird quickly took notice of the article and served a notice of claimed infringement with a request to remove the article from Boing Boing’s site. This notice was specifically served to Boing Boing contributor and co-owner Cory Doctorow and it was sent to them on December 20, 2018. The notice is claiming that Cory Doctorow and Boing Boing are infringing on the intellectual property of Bird and are also violating the publication’s ToS (Terms of Service) by encouraging readers to buy and use an illegal product and encouraging readers to deface Bird vehicles.
The EEF, or Electronic Frontier Foundation, is acting as legal counsel for Boing Boing and has stated Bird’s notice is flat-out incorrect and vague, meaning it has no legal justification. The EEF focuses on citing the fact that massive amounts of Bird’s scooters are being impounded and that it is in no way illegal to purchase them from impound auctions and modify them when they are personally owned; It also touches on the fact that Boing Boing is not infringing on Bird’s intellectual property whatsoever and that the article would’ve been protected by the Constitution’s First Amendment even if it was promoting illegal activity, which it is not. Bird has not offered further comment on the issue, but it is of note that Bird may be operating illegally themselves as they introduce their e-scooters across the nation without approval from local city officials. Investors haven’t seem to have had a reaction to this news yet, but further developments may cause them to do so; This could also have weight in denying the rumor that Bird is receiving funding from Fidelity.
Even though Bird is having trouble with other city and government officials, some members in the government have come out in support of integrating the company’s vehicles in cities across the US. Cleveland City Council member, Kerry McCormack, has came out in favor of the company providing scooters to the Cleveland area when the city ordered Bird to remove their vehicles from their streets until laws could be put into place to govern the use of them. Columbus, Ohio mayor, Andrew Ginther, focused on developing regulations for the scooters in his city instead of out-right banning them and has implemented emergency legislation for e-scooter riders until full laws can be put into place. Lastly, New York City Council member Antonio Reynoso also supports the introduction of Bird’s alternative transportation into his area, stating that it can assist the city while the neighborhood’s L-train shuts down for a 15 month rebuild. Overall though, there does seem to be heated discussion on the issue of regulating and allowing e-scooters into cities as both the public and the government have mixed responses to this new service.
Now, some information about Bird itself as a company. It was founded in 2017 by former Lyft and Uber Executive, Travis VanderZanden, in the city of Santa Monica and currently has $415 million in funding. It’s focused on providing dock-less e-scooters that can found and unlocked with their app in available cities. The company’s mission is to create a new solution to last-mile transportation over cars. This mission was developed because Bird believes people want less traffic, less pollution and new transportation options in their cities. They also focus on saving space, stating that they can fit ten of their scooters in one typical car parking spot. Bird is currently available in 100 cities across the globe and also offers their services to 15 universities. The start-up is also concentrated on accessibility and safety, supporting the global Vision Zero movement by providing free helmets to their users and giving them clear safety guidelines on their website. They also plan to offer franchising opportunities with local entrepreneurs soon that will offer personalized e-scooters and a website for those who wish to start a scooter rental business in their area. Their company currently offers their Bird Zero model scooters to both customers and eventual franchise owners; The Bird Zero model scooter boasts map-ready GPS technology along with anti-theft and GovTech tools. To check the availability of Bird in an area, simply download their app.
Bird may be facing regulatory and legal issues, but it appears they have overcame them for the most part; Even if some cities refuse e-scooters, the company still operates in 100 others, so local regulatory issues simply aren’t stopping them. Just a little over a year after being launched, they have completed over 10 million scooter rides for customers across the globe. As the new year begins, it looks like Bird will develop their focus on collaborating with cities they introduce their services to, ensuring that the company’s operations will continue to expand world-wide; This focus depends on not appealing past decisions with cities that have restricted or banned e-scooters and instead working with current and new cities that wish to expand what they can use for public transit. The e-scooter start-up also wants to differentiate themselves from competitors by developing and manufacturing new models that are unique in the now saturated market; Some ideas include vehicles with more rugged, off-road features as well as new software and features for their customers, it’s also possible that the company may manufacture items beyond e-scooters for their ride-sharing platform.
In conclusion, Bird may be facing fierce competition and suffocating regulations, but that isn’t appearing to stop them whatsoever. Although their customer-base and funding is similar to that of Lime’s, the rumored $300 million investment from Fidelity could give them the significant advantage they need to lead the e-scooter market. The company is dealing with regulatory issues the best they can, but e-scooters in general are causing intense debates on both sides through-out the US; Their plan for dealing with these regulations, and in some cases bans, is focusing on serving and collaborating with current and new cities that want alternative transportation options. Their mission is to provide different transportation that will reduce clutter, traffic and pollution instead of promoting it; Bird also seems to be a huge supporter of safety for their riders by strongly supporting the Vision Zero initiative. They plan to offer new and unique vehicles to their customers soon, but there is not yet an estimate on when they plan to manufacture or release their new vehicles to the public.