Electric scooter company Lime has raised $170 million in a round of funding led by Uber, with participation from Alphabet, Alphabet’s VC arm GV, and Bain Capital, among others. As part of the deal, Uber is transferring its electric bike service Jump over to Lime, which will “further expand” its integration with Uber’s mobile app.
The announcement comes after a turbulent couple of months for urban transportation. The pandemic-driven global lockdown has meant that demand for scooters and ride-hailing services has plummeted, with Lime pulling its platform from major markets back in March and Uber suspending its carpool offering. In the two months since, Uber has tried to adapt by putting its vast transport network to other uses, while both Uber and Lime have laid off significant portions of their workforce.
Reports emerged earlier this week that Uber was looking to invest in Lime at a $510 million valuation — 79% lower than its previous valuation — with an option to buy the company outright for a set price sometime in the next few years. Neither company has confirmed Lime’s valuation at this round, but it has almost certainly lost its unicorn status.
Combining Jump and Lime gives both micromobility platforms greater reach and breadth, while Uber’s sheer scale will help promote the services more prominently inside its app.
Many cities around the world are planning to turn streets over to pedestrians, bikes, and other cleaner forms of transport once lockdowns lift after many feared people would use their cars more frequently to avoid public transportation, thereby increasing pollution. Today’s news not only gives Uber a greater stake in Lime — which it had invested in previously — it also allows the transportation behemoth to double down on cleaner options that help people adhere to social distancing measures.
Earlier this week, news emerged that Intel was planning to pay $900 million to purchase transit platform Moovit, which has also been impacted by the decline in urban traffic. It later emerged that Moovit had been looking to raise more capital, but when the pandemic hit selling to Intel evidently made sense.
These two deals in the space of just a few days are early indicators that we can likely expect to see quite a bit more M&A activity in the months ahead.