Will Uber gobble up Lime or fly off with Bird?

Winter is coming. It’s time for scooter startups to find a cozy, protective blanket to get them through the chilly months.

For Lime and Bird, that could be Uber . The pair of venture capital darlings, which both operate fleets of electric scooters around the world, are said to be in talks with the SoftBank-backed ride-hailing behemoth about a possible acquisition, as first reported by The Information.

The news follows Lyft’s acquisition of bike-rental service Motivate, Ford’s acquisition of dockless bike and e-scooter startup Spin and Uber’s acquisition of JUMP Bikes. The trio of transactions are likely the first of many deals, as M&A activity in the scooter sector will inevitably heat up in the coming months.

Uber, which has scooters available to rent within its mobile app in Los Angeles and Austin courtesy of JUMP, is looking to one of the two startups to beef up its scooter supply, though both companies are denying reports of an impending deal. Bird’s chief executive officer Travis VanderZanden told TechCrunch simply that “Bird is not for sale.” Meanwhile, a spokesperson for Lime told us they are “focused on building an independent company,” or, in other words, “Lime is not interested in Uber’s courtship.”

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Uber declined to comment.

Scooter startups don’t come cheap

An acquisition of either Lime or Bird would be quite expensive. Both companies are worth more than $1 billion and would surely hike up their valuations amid M&A talks, especially considering reports that both are currently fundraising at even higher valuations. Bird, for its part, was valued at $2 billion this summer and Lime boasts at least a $1.1 billion price tag. Uber already holds a minority stake in Lime, though, which would cheapen that deal a bit.

An Uber acquisition would surely satisfy their investors, but I’d wager neither Lime nor Bird’s founders are ready to relinquish their independence. Both startups have been working tirelessly to build sustainable businesses and expand beyond bikes and scooters. Bird recently launched Bird Platform, an interesting new service that allows entrepreneurs to buy Bird’s scooters at-cost and rent them out themselves as a side business.

For a small fee, entrepreneurs can now manage their own fleet of Bird e-scooters

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Lime, a couple of weeks prior, released its first fleet of “LimePods,” shareable vehicles that are now available to rent via the Lime app in Seattle, and it’s working on the launch of a line of brick and mortar storefronts in major U.S. and international cities. On top of that, both companies have been racing to tackle new markets around the globe, from Sydney to London, in 2018.

Lime is debuting its line of shareable vehicles in Seattle this week

Together, the two companies have raised nearly $1 billion in venture capital funding in about a year’s time. As the two leading brands, they are quickly turning e-scootering into an acceptable mode of last-mile transportation in the U.S. Their recent behavior suggests the companies are eyeing a future where they are a go-to multimodal transportation platform, like Uber, rather than the subsidiary of one.

Investors, however, have a different perspective. Sources tell TechCrunch some of Lime and Bird’s backers are encouraging the companies to continue discussions with Uber. Despite being extremely young companies — some of the youngest to rack up valuations that high ever, actually — Lime and Bird are costly, which seriously limits their exit options. Lime is backed by GV, IVP, Coatue Management, GGV Capital and others. Bird is backed by investors including Accel, CRV, Greycroft, Sound Ventures and Upfront Ventures.

What does Uber want?

When Uber shelled out $200 million to acquire JUMP Bikes earlier this year and made dockless bikes and scooters rentable in select cities, it became clear the ride-hailing giant was doubling down on micro-mobility.

“We see the Uber app as moving from just being about car sharing and car-hailing to really helping the consumer get from A to B in the most affordable, most dependable, most convenient way,” Uber chief executive officer Dara Khosrowshahi told TechCrunch’s Megan Rose Dickey at the time of the deal. “We think e-bikes are just a spectacularly great product.”

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He added that he’d been staring at e-scooters “quizzically on the streets” and thought they were in an “odd spot” due to regulatory issues. Well, the latter is still true in many cities, but scooters have certainly become more widely accepted as they’ve invaded neighborhoods in Seattle, San Francisco, Denver, Austin, Paris and beyond.

Now that Uber is serious about scooters, it needs to increase its supply. Lime, given Uber’s existing stake in the company and its lower valuation, is a natural target.

With Lime teaming up with Uber, can rival Bird afford to go it alone?

Of course, there are many, many, many other small e-scooter operators Uber could target, like Skip, Scoot and Grin, to name a few. Spin, one of the early entrants to the e-scooter market, however, is no longer an option. The startup had raised about $8 million in venture funding and sold to Ford for around $100 million in a deal confirmed just a few weeks ago.

Uber is expected to go public in early 2019. The company released its third-quarter financial results last month, reporting an increase in revenue of five percent quarter-over-quarter at $2.95 billion — up 38 percent year-over-year. Gross bookings were up six percent QoQ and 34 percent YoY at $12.7 billion. Net losses, however, were up 32 percent QoQ to $939 million on a pro forma basis.

The company says it’s investing heavily in Uber Eats, its bikes and scooters, and Uber Freight as it expects each of those efforts to become even larger contributors to its overall business.

Uber will likely make a move on Lime in Q1 2019, before the company closes yet another fundraising round and prices itself higher than even Uber would be willing to pay.

Original Article : HERE ; This post was curated & posted using : RealSpecific

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