Investors are cooling on micromobility technology, according to data from research firm PitchBook.
The sector, which includes shared e-scooters and bikes, has raised $795 million from investors in the current quarter across seven deals, and $1.3 billion so far this year across 33 deals. That’s compared with $4.8 billion in the first three quarters of 2018 over 48 deals, for a decrease of about 73% in value and 31% in volume.
Part of the reason for the decline is that there haven’t been any “mega” deals for scooter companies recently, versus 2018 when Bird and Lime raised $385 million combined in the first half of that year. Bird’s $150 million funding round in June 2018 made it the fastest company ever to achieve a billion-dollar valuation—that is, become a “unicorn”—at the time.
Why aren’t those sorts of deals happening any more? One possibility is that investors have grown more cautious of the scooter proposition. Off-the-shelf consumer scooters that many companies initially rolled out had short lifespans and poor economics. Bird, which started out with rebranded Xiaomi devices, posted a $100 million loss (paywall) in the first quarter of this year, which its CEO attributed to a “one-time accounting write-off from old retail scooters.” Companies are now hard at work designing better, more durable scooters for shared use, something investors probably want to see before handing over more money.