In the worst of the coronavirus pandemic, some of the most interesting technology company movements are emerging. Or at least one of the most peculiar and curiously most affected sectors by confinement. The latest news in this regard, confirmed after the first rumors released by The Information, focuses on the new Lime’s millionaire round of financing. Or what is the same: a breath of air for a company that, like the rest of the sector, needed liquidity.
The scooter giant has announced an operation of $ 170 million; which values the company at 510 million euros – 79% less than in the previous round. But the volume of the deal is not the only strategic move. The company that has led the investment is Uber, followed by Alphabet, Bain Capital Ventures, GV.
In addition, with this agreement, the relationship between Lime and Uber – which already came from afar with previous operations agreements – is further strengthened. As explained in the scooter company’s statement, Lime absorbs the business operations of Jump – Uber’s scooter and bicycle division – in all the markets where they are still active.
“Lime has the operational expertise and undivided approach to build a scaled, sustainable micro-mobility business,” explains Dara Khosrowshahi, CEO of Uber in a statement. “We are pleased that our customers continue to have access to bicycles and scooters in our two applications because we believe that micro-mobility is a critical part of the urban landscape, now more than ever.”
Does this mean the disappearance of Jump? For now, both brands will maintain their presence in the operating markets. This agreement implies that users will be able to use the scooters of both companies interchangeably through the two enabled applications. A decision that, at least in Spain, has a strategic sense. A change of name of all the scooters from Jump to Lime –and therefore, the disappearance of the brand– would imply a loss of the licenses that operate under that banner (at least in Madrid).
Clearing up Lime and Uber accounts
The reality is that this operation comes at a sensitive time for both companies. And also for the sector that faces its own success with valuations above reality and the search for profitability for a business that does not yet know how to face its own reality regarding theft, vandalism and short-lived vehicles.
On the one hand, Uber –which just today is facing the call to shareholders to contribute the results of the first quarter of 2020– already knows that this year will be disastrous for its accounts. The idea of achieving profitability before the end of the year has already been dismissed by the company. Which, in addition, has already had to lay off 14% of its staff (3,700 employees) as a result of the COVID -19 crisis and the drop in demand in all its markets.
The transfer of the scooter business, even taking into account the investment operation, would be part of that strategic move to achieve green numbers.
On the part of electric scooters, and as a consequence of shared mobility, confinement has had an effect similar to that of vehicles. Only now, with the decrease in deaths in some geographies, the service is beginning to resume its activity.
But the pre coronavirus situation was not much more positive for Lime. The giant, like Uber, was on a mission to find benefits anyway. Already in early 2020, the company laid off 14% of its workforce (about 100 employees) globally to meet this requirement.
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