Voi’s $160 Million Raise Shows Investors Still Trust Scooters

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Scooter-rental startup Voi Technology AB said it’s secured $160 million of new funding, just weeks after German rival Tier Mobility raised $250 million from investors including SoftBank Group Corp.

The Swedish company’s Chief Executive Officer Fredrik Hjelm said it shows investors are confident that Europe’s e-scooter companies are succeeding through steady growth where their bigger U.S. rivals struggled as a result of aggressive expansion.

“It seems like the tables have turned,” Hjelm said in an interview ahead of the announcement on Tuesday. “In early rounds they raised hundreds of millions of dollars and burned through that money, and haven’t been able to build the kind of city relationships, operations or product that were needed.”

Voi’s new funding was led by Raine Group. Hjelm declined to give the exact valuation, saying it was “north of $500 million” but not quite $1 billion.

“Give us London and give us one more year,” he said when asked how long it would be until the company would reach the bigger number and be profitable across all its markets. The U.K. is in the process of legalizing e-scooters after officials sought support for alternatives to public transit systems during the pandemic.

Larger U.S. scooter rental companies Bird and Lime have struggled this year, their business models strained by the pandemic that kept customers stuck at home. Both had to drastically reduce their fleets, cut hundreds of jobs and seek emergency funding, in a blow to venture capitalists who invested more than $1 billion in the companies.

Hjelm said Voi sought to grow less aggressively, which resulted in better relationships with cities and more sustainable economics for its fleet of tens of thousands of scooters.

A spokeswoman for Voi said the company has raised a total of $325 million since it was founded in 2018, including the latest round. The new investment will help the company develop its rental platform, expand to more cities and support the rollout of advanced scooter hardware, it said in a statement.

Other participating investors in the new round included VNV Global, Balderton, Creandum, Project A, Inbox and Stena Sessan.

©2020 Bloomberg L.P.

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