Bike-Sharing Economy is the new Unicorn Club!

Bikes new frontier of on-demand transportation

Nowadays we see tech startups tackling all fields of transportation and logistics. From cab to ride-hailing, from on-demand food delivery to small freight delivery, from commercial truck delivery to shipping. Bicycles always seemed the least likely to be next: why would you pay to ride a bike, on-demand? That what my reaction before putting some thinking into it.

  1. Urban areas are increasingly congested, both in developed as well as developing countries. Come on, let’s admit it: driving a car in the city is frustrating.
  2. In developing countries bikes still represent the primary transportation mean, followed by scooters.
  3. People in developed countries are increasingly environmentally-aware and prefers to purchase services and/or products accordingly
  4. In Europe the union has financed and supported projects to make cities more bike-friendly. Several EU-financed bike-sharing services sprung up across European cities. I recall my rides with my “Valenbici” (bike-sharing service in Valencia) when I was an exchange students, and I simply loved it!
  5. Uber successfully removed the ownership factor from the worldwide demand for transportation, meaning people are more accustomed to the concept of on-demand.
  6. Technology lowered the cost of deploying and managing a bike fleet in an urban area. The simple fact that the bike doesn’t need a dock-station is revolutionary for the customer’s experience.

The Front-Runners in dock-less bike sharing: China

Moride.com. The heavy-weight from Shanghai. According to Crunchbase, this company raised a Series B of $10m in August 2016 and went on to raise $100m (Series C - Sept 2016), $215m (Series D - Jan 2017) and a colossal $600 (Series E - June 2017).

West Coast Represents: Bike-Sharing in California

LimeBike.com. Based in San Mateo, it raised $10m in March 2017 with Andreessen Horowitz as lead investor.

Early-signs of life: Europe (or soon-to-be former Europe)

bikeomni.com. UK-based Omni pulled in $19.7m last March from top-tier investors like Accel Partners and billionaire Li Ka-Shing (richest man in Hong Kong: never name has been more perfectly fitting. Did he actually change it on purpose? Who knows.. KA$HIN’!)

Business model: advertising?

Now the big question: is the dock-less bike sharing business model sound and sustainable? Well, I guess it is at scale. I don’t believe we would see this magnitude of investments otherwise. It feels like the cab-hailing battle just few years back: everybody knows the industry will need to go through shake-ups and acquisitions till a clear winner is determined. In addition, it seems pretty clear that riding fees are just one portion of the revenues: bikes are perfect urban advertising space! TechCrunch just covered this very topic a couple of days ago.



Gringotts Ventures

An initiative of @LuckyValentini — Entrepreneur and finance geek. I write about startup life, trends in tech, venture capital or any other interesting topics I happen to stumble across. Views are my own, prophecies are wizardry.

Gianluca Valentini

Written by

VP Corporate Development @ HousingAnywhere.com | Venture Advisor @ EQT Ventures | Former founder (exit) | Angel investor @ GringottsVentures.com

Gringotts Ventures

An initiative of @LuckyValentini — Entrepreneur and finance geek. I write about startup life, trends in tech, venture capital or any other interesting topics I happen to stumble across. Views are my own, prophecies are wizardry.