(Bloomberg) -- Europe’s No. 1 rival to ride-hailing giant Uber Technologies Inc. plans to invest more than 100 million euros ($118 million) next year to expand its fleet of rentable electric scooters and bicycles across the continent, even as governments clamp down on personal mobility to battle the pandemic.
Bolt Technology OU wants to boost its network to 130,000 scooters and bikes in more than 100 European cities following a 100 million-euro funding round in May. The expansion includes first-time inroads into countries like Germany and the U.K. Ride-sharing has recovered from Covid-19’s spring outbreak and scooter rentals never dipped. But the next three to six months may be more “difficult” overall amid the virus’s resurgence.
“It seems that even at the time of Covid restrictions, people see this as a safe way to commute as this is in open air and alone,” Chief Executive Officer and co-founder Markus Villig said in an interview in Tallinn. “We are very optimistic that the volumes there will fall less than in car rides.”
The Estonian company’s strategy pits it against Lime, which in May bought Uber’s Jump scooter unit and received a $170 million infusion from an investors’ group led by the U.S. ride-sharing company. It also comes in the wake of growing tension with city officials across Europe, who increasingly consider the recent rise in on-street scooter rentals a hazard to pedestrians and traffic. Riding restrictions have been placed by cities in contries such as the Czech Republic, Sweden, France and the U.K.
Surviving Pandemic
Operating in more than 150 cities across Europe and Africa, the Tallinn-based company formerly known as Taxify has expanded into food and package delivery, while Uber and Lyft Inc. have slashed jobs and focused on home markets to survive the pandemic. The virus’s second wave is now gripping Europe and forcing renewed clampdowns on travel, outside activities and work.
What Bloomberg Intelligence Says
“Scooters and bikes is a seasonal business but could prove to be a viable alternative to public transportation amid the need for social distancing. The only way it could help with customer loyalty or profitability is if competitors pull out of the market and there is lesser competition.”
-- Mandeep Singh, senior technology analyst
Bolt rolled out electric scooters for the first time in 2018 and launched its own design this year, when it expanded the service to 45 cities in 15 countries on a bet consumers will opt for less-polluting city transport to boost the emerging micro-mobility business.
The company’s e-scooters are profitable “in most cities,” largely due to costs shared with Bolt’s other businesses, Villig said, while e-scooter usage has exceeded ride-hailing in some cities.
“The reception has been very good,” Villig said. “In terms of investment volumes, the ride-hailing business is still bigger in absolute amounts as this is our most mature business, but our most aggressive expansion now is in electric scooters and bicycles.”
The Didi Chuxing and Daimler AG-backed company, which has more than 30 million users globally, tapped Naya Capital Management for its May capital increase, which pushed the company’s to 1.7 billion euros.
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