The rising number of E-scooters on the streets has been giving a strong message that maybe this is the next sustainable means of transportation. According to a report, the global electric scooters market size was estimated at USD 18.6 billion in 2019 and is estimated to grow at a CAGR of 7.7% from 2020 to 2030. The e-scooter companies continue to attract VC firms, angel investors, ride-hailing companies who pour millions into them.
Reasons behind the popularity of E-scooters
E-scooters have become more popular than docked bikes as a way of shared transportation. There are numerous reasons behind the traction that e-scooters companies and startups have been receiving in recent years –
- Reducing greenhouse gas emissions: No article about e-scooters can be written without the mention of the environment. In recent years, many people have been advocating climate change, and millennials realise the need to adopt an eco-friendly lifestyle. Since e-scooters only use a small amount of electricity without any emissions, their use can enhance the air quality of our cities and the health of the residents.
- Portability: Electric scooters are foldable and lightweight, leading to easy portability and handling. It is a great option to cover short distances.
- Government Incentives: With the climate change pressure intensifying day by day, Governments have started formulating several policies to increase the penetration of e-scooters like providing consumer benefits, subsidies to manufacturers, supporting R&D etc. For example, the Corporate Average Fuel Economy (CAFÉ) standards in the US have improved the adoption rate of energy-efficient automobiles.
Challenges faced by e-scooter companies
Even though there are numerous reasons for supporting this market’s growth, the challenges that scooter companies face are not less either. These companies face problems from every direction like rider injuries, intense competition, vandalism, theft and hostile regulations in many cities.
On June 4th 2018, San Francisco imposed a temporary ban on the local operations of the scooter companies – Bird, LimeBike, and Spin. There were concerns related to some serious and also fatal accidents caused by scooters. According to a global survey, riding e-scooters led to 29 deaths in 2019. This is tragic, but the number is still meagre compared to the thousands of deaths caused while driving cars and motorcycles. Singapore has also laid down some strict regulations like registering the electric scooter with the local transport authority and getting a license and permit to use the electric scooter in public.
Looking at all the challenges and strict laws, one might think that the e-scooter mania must have subsided even before it began. But on the contrary, it has continued to rise, even during the pandemic.
The global E-scooter market
The Asia Pacific region dominated the global E-scooters market, valuing US$ 13.9 billion in 2019. Most of the e-scooter manufacturers are from China, Taiwan, and Japan, and China is one of the leading consumers of e-scooters and a leading exporter. Some prominent players in this industry are Lime, Bolt, Bird Rides, Inc., and Govecs AG, which provide last-mile e-scooter rental services in various countries.
Recently there has been steep growth in the entry of international electric scooter manufacturers in North America as well, mainly attracting the younger population. The largest e-scooter provider, Lime raised US$ 935M with investment from Google’s GV, Andreessen Horowitz and Bain Capital being its lead backers. Even though the business experienced a hard hit due to the pandemic, still many VCs were investing in e-scooter companies. Lime itself raised US$ 170 million in a round led by Uber in May 2020. Founded in 2017, San Francisco-based Lime operates in more than 12 cities across 30 countries.
Some other large rounds of 2020 are:
- Voi Technology, a Stockholm-based startup, raised US$ 160 million in a December Series C round.
- Tier Mobility, a Berlin-based e-scooter startup, raised US$ 250 million in Series C round in November, led by SoftBank.
- Bolt, an Estonia-based ride-hailing and e-scooter platform raised US$ 182 million in Series D round in December.
According to Crunchbase, at least 28 micro-mobility companies raised investments of US$ 2 million or more in 2020. Compared to the US and Asia, European e-scooter companies have started doing much better recently. According to Pitchbook, investors have poured in US$ 371 million into U.S. micro-mobility firms, whereas the European rivals raised US$ 687 million in 2020. Europe was also the only region to show a growth in venture investment in the micro-mobility sector, up by 64% from 2019.
Conclusion
The e-scooter industry has many supporters but also many adversaries. Those in favour say that adopting e-scooter will reduce car emissions, make cities cleaner and the air more breathable, there will be less noise and safer streets. Those against say that they offer sparse health benefits and pose safety issues, for example – a dockless hire scheme will lead to people parking scooters anywhere, posing a threat to blind people. There are also many people with mixed opinions. “E-scooters are not the golden solution to reducing CO2, but if they can reduce short car trips in cities, they can form part of a sustainable modal mix with cycling and walking,” said Nick Davies, Research Fellow in urban ecology at the University of Salford.
From the above discussion, we can conclude that even though the pandemic has disrupted the e-scooter market to some extent, it will be interesting to see how the e-scooter mania pans out across major metropolitans around the world.
For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.
We try our best to fact check and bring the best, well-researched and non-plagiarized content to you. Please let us know
-if there are any discrepancies in any of our published stories,
-how we can improve,
-what stories you would like us to cover and what information you are looking for, in the comments section below or through our contact form! We look forward to your feedback and thank you for stopping by!
Next Article
