Bird, a startup that leases electric scooters, is valued at $ 2.5 billion in a new funding round led by CDPQ and Sequoia Capital, the company announced at TechCrunch Disrupt Thursday. The company says it raised $ 275 million in the Series D round, which it claims is a testament to the company's efforts to improve the unit economy.
Bird's new valuation of money was first reported earlier this summer by TechCrunch and The New York Times . There is a slight increase compared to the company's $ 2.3 billion valuation from last year, but it is still a sign that venture capital firms are not pumping money into e-scooter companies, despite reports of steep cash losses and rampant vandalism of the scooters. But the temperature around sharing the scooter has definitely cooled down: Bird raised $ 41[ads1]8 million in funding last year.
It may have something to do with grim reports that emerged earlier this year about the financial instability of scooter sharing. Bird lost nearly $ 100 million during the first quarter of 2019, while revenue shrank sharply to just around $ 15 million, according to The Information . In the spring, the scooter startup was down to about $ 100 million again in cash.
Bird says it has been able to woo investors, thanks to the renewed emphasis on unit economics. That's how much revenue each scooter brings to the company. One of the most important figures to consider is the life of each scooter. The more trips and miles a single scooter can cover, the better it is for scooter companies who have to recoup the costs of each vehicle before they can start making money.
However, reports suggested that electric scooters broke down before the companies were even able to pay back the costs. Last year, Quartz published an analysis based on figures provided by the City of Louisville, Kentucky, which found that the life of a scooter was 28.8 days. Early models purchased from the shelf from Chinese manufacturers collapsed under heavy use of the fleet, prompting companies to design newer, better scooters.
Bird CEO Travis VanderZanden told The Verge in March last year that every scooter needed to be in service for six months to keep the company steady. Since then, the company has not rolled out one, but two new scooters: Bird One in May and Bird Two in August. Both scooters, the company says, are designed to be more durable and durable. Bird One has an average lifespan of 15 months, while Bird Two has not been widely distributed yet.
"Almost a year ago, we recognized that the world was changing," VanderZanden said in a statement. “Gone are the days when top line growth was the leading CPI for new companies. Positive unit economics is the new target line. As a result, we switched from growth to unit economics as the top priority for the company. ”
According to sources familiar with the company, the new funding will be used to chart a clear path to profitability and continued vehicle research and development, which Bird believes is a contributing cause of positive unit economics.