Can Lime recapture the promise and excitement that it generated as it transformed from scrappy startup to Unicorn status? In March of 2015, the founders of what is now known as Lime raised a $12M Series A to begin building a company that they hoped would transform the way commuters travel around urban centers. Three years later, those founders, under an entity named Neutron Holdings, Inc., doing business as Limebike prior to changing its DBA to Lime, raised several hundreds of millions more dollars to build on its initial dream of creating a global mobility company.
The promise of a dockless bicycle sharing seemed limitless. Chinese dockless bikeshare companies were riding high and appeared to be unstoppable. The numbers of users that Lime's Chinese bikeshare counterparts reported was jaw dropping and Lime positioned itself to capture the same magic in the United States. But, as with all magic moments, things began to change for the Chinese dockless bikeshare companies. The strategy of saturating Chinese cities with bikeshare bicycles began to backfire as it created a race to the bottom for those operators. As competition tightened and the unit economics of these bikeshare bicycles appeared to be consistently in the red, these Chinese bikeshare companies transformed into black holes for its financial backers, with no promise of profitability in site.
Chinese bikeshare operators began folding one by one, and perhaps, the operators of Lime forecasted this outcome as they began to expand Lime's mobility offerings, rolling out e-bicycles and ramping up its focus on e-scooters (which appeared to have better unit economics than bicycles) as it surpassed its main e-scooter share competitor, Bird. As Bird, intentionally slowed down its growth to focus on unit profitability, as reported by The Information, Lime focused on increasing its market share, which in turn elevated its visibility.
In February of 2019, Lime's valuation easily enjoyed unicorn status as it raised a $310 Million Series D round, valuing Lime at $2.4 Billion, up from its previous valuation of $1.1 Billion when it raised $335 Million during its Series C round. The fun and utility of e-scooters was contagious as users in many regions of the United States and abroad enjoyed the ease and convenience of picking up an e-scooter, scanning the QR Code to unlock it and hopping on it to begin their ride.
From a user's standpoint, Lime and its other e-scooter competitors offered a greatly valued service that filled, what was apparently, an overlooked gap in the market to many individuals. From an investor standpoint, questions about the e-scooter business model began to arise. Although there are numerous reports that question the viability of the e-scooter business model, representatives of Lime (and Bird) have refuted these suspicions despite operational cutbacks to Lime's (and Bird's) operations in an effort to achieve profitability.
Now, as the Coronavirus has taken affect on the global economy at large, it has also further zeroed in on the e-scooter sharing industry. Lime and and Bird have both taken steps to survive during these hard times, but will it be enough? As reported by The Information, Lime is currently seeking emergency funds at a current valuation of $400 Million, slashing its previous valuation by 80% from its previous value of $2.4 Billion.
The e-scooter share boom has been a wild and exciting ride for fans of micromobility. The management teams behind Lime and its competitors are well aware of the stakes at issue during these trying times. At the very least, Lime and its competitors have proven that there is a need for rethinking the traditional modes of urban transit. Despite the global markets looking like lemons these days, we're hoping that Lime can regroup and turn its pioneering urban transportation offerings into a nice, inviting glass of "Limon"-aid.
Photo by Misael Moreno
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