E-bike and e-scooter startups have been hit hard by the COVID-19 pandemic crisis. Investors in the industry are wagering on a post-crisis rebound as people change their traveling habits considering social distancing protocols. Experts predict that micro mobility scooters will bounce back after the pandemic lockdown and travel will gradually return to its normal pace. The business sector is quick to pick up on the analysis and are rooting for micro mobility’s return after the lockdown. Investor’s positive outlook after the lockdown will boost this industry sector into a brighter path.
Companies on the Red due to Poor Profitability
Micro mobility startups are enduring the hardships of poor profitability due to market saturation. Electric vehicles suffered a reduced number of riders caused by the pandemic and the lockdown protocols. Venture Capitalists invested $1.9 billion into 64 portfolios in micro mobility deals. The investment did not live up to what businessmen put in in 2018 tantamounting to $5.4 billion over 61 micro mobility transactions as what Pitchbook data showed.
As of May 27, Venture Capitalists’ deals in micro mobility funneled in $229 million since the onset in March. A 26% reduction in comparison to the same period a year ago. The biggest financial movement during the period for electric scooter startup was with Lime to the amount of $170 million in the first week of May, after the company announced that it was shedding its workforce by 13% a week earlier.
Micro Mobility’s Return After the Lockdown: Venture Capitalists Infusion to the Micro Mobility Sector
Bird electric scooter company was in trouble and retrenched 30% of its employees in the last week of March. Two months earlier, the firm poured in an additional $75 million for its Series D. Summing a total of $350 million into the industry.
Horace Dediu, a research/analyst of Asymco, reported that governments around the world will allow the proliferation of micro mobility transportation. Due to the transition of travel habits among urban dwellers in centers for its growth and development. Dediu is optimistic that after the lockdown precautionary measures lessen. The electric scooter and micro mobility industry will be in improved light than conventional means of transport. Social distancing will propel the electric scooter as an alternate option to stay away from the contagion by avoiding mass transit.
Investors in transport companies are preparing for the onset of this revival of electric and micro mobility scooters after the lockdown. And adjust to the new normal that will surface in society. Estonia’s Bolt, a ride hailing app providing a convenient platform for the transport sector, shelled out 100 million pounds (roughly about $111 million). Where a part of this figure will go to the development of the electric scooter division. At about the same period, another ride hailing company, OLA, bought e-scooter firm Etergo for its e-vehicle entity.
Acquiring Micro Mobility Companies on the Red
Dediu further stated that creating an in-house micro mobility entity may be a set-back for several ride hailing firms. But micro mobility created companies short-term liquidity problems could result in alluring acquisition targets. For investors with positive outlook on micro mobility’s return after the lockdown.
In this premise, ride hailing groups with enough liquidity could rise up as bidders for struggling micro mobility services. To solidify their own operations under the pandemic lockdown. Ride booking companies under duress will attract investors and offer their company’s worth. Businessmen who see the potential of the micro mobility’s return after the lockdown will find the offer hard to resist for sinking firms.
Ebbing Riding Clientele During the Lockdown Period
Ride Hailing businesses experienced a downturn in rider bookings of up to 70% amid the pandemic crisis, as stated by management consultant McKinsey & Company. Travelling masses are on the uptrend. Recovery will slow down due to the social distancing protocol set by authorities not enforced in cars and public transportation.
Some urban centers are going extreme to the point of shutting down streets. London, for instance, restricted car use on some roads as lockdown policies are lifted. According to a Guardian report, underlining the need for ride hailing providers to diversify their offerings.
However, developing their company models will not come without challenges. That they must face squarely to keep their heads above water. Electric scooter companies and other ride hailing entities have to adjust to the new normal that resulted in the global pandemic crisis.
What is critical in the struggling retailing business is that sinking companies will try to seek help from investors who are positive enough in the micro mobility’s return after the lockdown. They need this for new equipment to keep their businesses afloat and put their units on the streets and maintain them. Otherwise, they will fold up or sell their companies.
For an update on Micro Mobility vehicles after the lockdown, visit us at www.electricscooter.com .