Swedish e-scooter start-up Voi Technology has raised $160m in new funding, less than a month after its German rival Tier raised $250m, as European mobility companies capitalise on demand for alternatives to public transport during the pandemic.
With last month’s pledge by Estonia’s ride-hailing service Bolt to invest a further €100m into scooters, European participants have together accumulated more financial firepower this year than their more established US rivals, Lime and Bird.
After years of American scooter companies flooding European streets with the lightweight electric vehicles, Voi is now planning to be the first to go in the other direction, by applying for a permit in New York City.
“The tables have turned,” said Fredrik Hjelm, co-founder and chief executive of Voi. “The Americans raised a lot of money but they burned through it quite quickly . . . Now after our round and Tier’s round, we will probably have more cash in the bank than they have and a much better foundation to build on.”
Bird and Lime have together raised more than $1.7bn over the past four years, according to deal tracker PitchBook. That far exceeded the capital available to Voi, Tier and other European operators — at least until now.
But Mr Hjelm and his opposite number at Tier, Lawrence Leuschner, argue that as a result, they have developed more efficient operating models and vehicle technology, such as swappable batteries that can be easily removed from the scooters for recharging, that has driven them towards profitability more quickly.
“We liked the history of the European operators being lean and efficient,” Jason Schretter, partner at The Raine Group, who is leading Voi’s latest round, which comes in a mix of equity and debt. Existing investors including VNV Global, Balderton and Creandum also participated.
Mr Schretter added that European cities were more attractive than the US for e-scooter rentals, thanks to a cultural preference for bikes over cars and greater urban density.
After a period of rapid international expansion, the coronavirus pandemic forced many scooter rental services to slam on the brakes earlier this year, triggering job losses across the sector.
Now, with local governments looking for environmentally friendly alternatives to crowded public transport systems as Covid-19 lingers through the winter, Tier and Voi have been able to reignite investors’ interest sooner than their California-based competitors.
Tier’s $250m round was led by SoftBank’s Vision Fund, valuing the Berlin-based company at slightly less than $1bn, according to people familiar with the terms. Voi did not disclose its latest valuation, but it is likely to be in the hundreds of millions of dollars.
As the UK has begun its first e-scooter trials this year, Voi has won permits to operate in 16 cities, including Liverpool and Bristol. “Overall the ramp up has been a bit slower than expected,” Mr Hjelm said, owing to the reintroduction of Covid restrictions in the UK, “but the utilisation and demand has been much higher than excepted . . . It’s clear there is a real demand from [UK] consumers for this.”
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