Demand for e-scooters in cities worldwide has helped the industry’s biggest players achieve multibillion-dollar valuations.
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. E-scooter startup
Tier Mobility extended a funding round to more than $100 million from $60 million, at a time of increasing regulatory scrutiny.
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.
Tier will use the extra $40 million for research and development, acquisitions, and to create new types of scooters.
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.
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.
Chief Executive Officer Lawrence Leuschner claimed that Tier has reduced it’s running costs by about 40% .About 85% of Tier’s fleet consist scooter equipped with removable batteries.
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,
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.
The future of transportation is riding on two wheels, not four. For cities clogged by cars, scooters and bikes are hailed by many as a convenient and cost-effective transportation alternative.
It’s a sizable opportunity for investors, with the global market for electronic two-wheelers estimated to exceed $22 billion by 2025.