Europe is the scooter market to win: our Series A investment in TIER

Paul Murphy
Oct 23, 2018 · 5 min read

Our cities are killing us with pollution. Northzone led the largest Series A investment in our history for an ambitious startup to fix this problem.

TIER announced today it has raised €25 million in Series A investment led by Northzone, with participation from existing investors Point Nine and Speedinvest, and a syndicate that includes Spain-based Kibo Ventures.

I moved back to London from Brooklyn with my wife and 3-year old daughter six months ago. While planning the move, we thought of all the parks and green space, lack of trash on the streets, efficient public transit, and the countless quiet neighbourhoods dotted around the city centre. It wasn’t until we started looking for houses that we realised just how dangerously dirty the air is across the city. In fact, London’s air is nearly 3-times more polluted than New York’s. In an effort to protect our little girl’s developing lungs, we pulled up the pollution map and identified a small handful of streets with “clean” air that we’d consider living, and handed it to our estate agent.

Unfortunately, London is not alone. In a misguided effort to reduce pollution, cities across Europe loaded up on diesel cars. Combined with inefficient traffic patterns designed for another era, Europe’s cities suffer from some of the worst, albeit less visible, air quality in the world.

Image: FT

Hyper aware of the fundamental mobility challenges plaguing cities across Europe, we searched for investments attempting to help solve this problem. At first glance, we didn’t focus too much on electric scooter sharing because of the relatively short distance they travel. But, we soon learned 20% of car-hailing rides were less than 3km. And that 20% dramatically slows down the other 80%, further amplifying congestion and pollution. When we spoke with city officials across Europe, it became clear they all felt underserved by existing bike and scooter sharing services.

Waning electric scooter supply chain challenges aside, there is clear demand from cities and consumers alike to diversify their commute away from cars and taxis. And, European cities are practically built for it. The US has 5 cities with NYC-scale population density, yet there are 21 such cities across Europe. When it comes to scooter-friendly / bicycle infrastructure, 18 of the top 20 bike-friendly cities are in Europe (the other 2 are Toronto and Tokyo). Last but not least, Europe is committed to cut fossil-based transportation in half by 2030, with multiple cities on the cusp of removing fossil-fuel based transportation in city centres altogether. As mentioned earlier, this isn’t just a high-flying goal; it’s a necessity. Europe’s cities are literally killing its residents and officials know they need to do something about it.

Europe is the sleeping giant in next-gen urban mobility.

Having recently launched in Vienna, TIER will use the Series A investment to launch their shared electric scooter platform across Europe. Although this is one of only a few Northzone mobility investments, we’ve been studying the space for a long time. Completely convinced urban mobility, as we know it today, is broken, we’ve looked at multiple mobility companies, but so far struggled to find the right combination of team, product and vision with the potential to be at the forefront of the inevitable change coming to cities around the world.

As for the competition, we know we’re not alone, and, thank god for that. We met with half a dozen extremely impressive teams starting scooter-based mobility businesses in Europe. Additionally, Lime and Bird are moving in fast with additional competition coming from DiDi-backed Taxify. Typically that would send alarm bells off in the minds of investors hoping for a big win. Not us. While we wish our large and small competitors all the success in the world, this will not be a winner-take-all market. No single company will solve this problem. This is going to be a rising tide industry with consumers and governments as the primary beneficiaries. There is so much at stake for cities to get this right, and so much genuine disruption on the horizon, we believe multiple enduring winners will emerge.

That said, we obviously wanted to pick the very best startup to back. Two important characteristics separated TIER from the others. First, TIER is genuinely focussed on solving the much broader problem of urban pollution and congestion. The biggest way to impact this today is scooters, but their longterm vision is much more comprehensive.

TIER’s mission is, quite simply, to change urban mobility for good.

The second unique characteristic of TIER was their relentless focus on working with municipalities. All too familiar with the challenges car-based ride-sharing and bike-sharing businesses created for cities, TIER aims to serve cities as much as their citizens. TIER’s scooter solution will be one of several tools available for cities to tackle their transportation challenges.

You couldn’t ask for a more experienced, humble, and ambitious team, with all of the components we feel are paramount to succeeding in this market. Knowledge of how to run an operationally complex business, strong supplier relationships, experience launching and running a ride-sharing business, and operating a distributed technology infrastructure. Northzone is incredibly excited to partner Lawrence, Julian, Matthias and the rest of the team at TIER.

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