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Lime, Bird seeking to capitalize on scooter-mania, sources say

October 15, 2018

Scooter-rental companies Lime and Bird Rides Inc. are less than two years old. They’ve both raised hundreds of millions of dollars. But that isn’t stopping them from looking for new financing with even loftier valuations.

Lime, officially Neutron Holdings Inc., has been meeting with investors about a new round of funding and has discussed a valuation of $3.3 billion or higher, according to three people familiar with the matter who asked not to be identified because the discussions are private. It’s unclear whether there’s investor appetite at that price, but Lime has expressed optimism about getting a deal done, one of the people said.

In the past few weeks, Lime also met with Uber Technologies Inc., an investor in the scooter company, about a potential acquisition, the people said. The ride-hailing giant already purchased an electric-bike rental company called Jump Bikes this year and is pursuing its own scooter strategy in an effort headed by executive Rachel Holt. In July, Uber said it invested in Lime at a $1.1 billion valuation.

Meanwhile, Bird has scheduled talks with investors and is seeking an even more stratospheric valuation, two other people familiar with the matter said. An asking price could not be determined. A previous investment in July valued the business at $2 billion.

Both Bird and Lime, which have entered dozens of markets this year, including Indianapolis, are seeking hundreds of millions of dollars in new capital, the people said.

The talks reveal the wild ambitions of these rival scooter companies. But some investors who are talking with the startups remain skeptical about their ability to build businesses that would justify those valuations.

While the deals may never get done at the prices being discussed, the proposed valuations reflect the mania surrounding scooter companies in Silicon Valley. Investors vividly recall a time when buying Uber shares at a $3 billion valuation seemed crazy, only to watch the company’s value climb to $76 billion today.

Lime and Bird are spending money aggressively, leaving growth-stage investors weighing whether this is a collective fever dream or the chance to invest in the next Uber.

SoftBank Group Corp. has met with all the major scooter companies in the past few weeks, including Lime and Bird, according to a person familiar with the matter. The powerful investor is weighing whether to bet on a scooter company or count on its ride-sharing investments like Uber to win out, the person said.

A spokesman for Lime said in a statement, “We don’t comment on industry rumors. We are always looking for strategic partnerships and to fund-raise. We’ve now built a strong brand with integrity that people want to join us on our journey and be part of the movement.”

A spokeswoman for Bird declined to comment.

The talks come as Lime has thrust itself into a contentious fight with San Francisco. Lime sued the city over its decision to reject its permit application, accusing the city of bias. The company lost a bid for a temporary restraining order against the city on Friday, but the legal fight continues.

Scooters from rival startups were deployed on San Francisco streets on Monday with permission from the city. Lime, and Bird remain grounded there.

 

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