Money is pouring into scooter startups
E-scooter startup Tier Mobility extended a funding round to more than $100 million from $60 million, at a time of increasing regulatory scrutiny.
Berlin-based Tier said Friday it added RTP Global, Novator Partners, and a third backer it declined to name, to its so-called Series B fundraising announced in October. One of Abu Dhabi’s sovereign wealth vehicles is also investing.
Regulators are getting less tolerant of scooters as they’ve grown in popularity. Montreal recently banned e-scooters, saying they were too often parked illegally, while a raft of U.S. cities are cutting back where they can be used. In Europe, Germany proposed rules to require a permit to park in public spaces. Last year France also introduced several new safety rules to ensure scooters have proper lights and braking systems.
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Chief Executive Officer Lawrence Leuschner said Tier will use the extra $40 million for research and development, acquisitions, and to create new types of vehicles to complement its fleet of tens of thousands of scooters. The company declined to comment on its valuation.
Demand for e-scooters in cities worldwide has helped the industry’s biggest players achieve multibillion-dollar valuations. The popularity of the North American front-runners has caused a surge of new competitors to spring up across Europe over the past two years. In January, California-based Bird Rides Inc. said it would acquire Circ, a German rival, for an undisclosed sum. Bird also said it raised an additional $75 million from investors on top of the $275 million round disclosed in October, the same month Tier announced its original Series B fundraising plans.
In the U.K., it’s illegal to ride a scooter on public roads under highway law. But the government is considering updating legislation to accommodate scooters as part of a regulatory review taking place this year.
Leuschner said Friday his company has found a new consumer retail business in refurbishing and selling old scooters removed from its fleet after a few months of use.
“Since November, we’ve sold between 4,000 and 5,000 of the models we introduced in Germany during the summer," he said in an interview. The models cost 699 euros ($755) and come with a free helmet, insurance, a license plate and a year’s warranty, he said.
Leuschner said about 85% of Tier’s fleet of scooters also now use batteries that can be removed, meaning the company doesn’t have to take entire vehicles back to a warehouse be charged.
“We’ve reduced our running costs by about 40% and it shows we can operate any ride profitably in any place," he said.
The company has raised $136 million since it was founded in 2018 and has spread to more than 50 cities, providing more than 17 million rides, mainly in Europe.