Berlin-based Tier Mobility has raised $60 million in venture capital to expand its electric scooter sharing service, a sign of how bullish investors remain even as cities struggle to regulate the new transportation mode.
Proponents hail electric scooters, and their electric bike cousins, as a key to helping cities become less dependent on cars and reducing emissions. At the same time, the flood of scooters on streets and sidewalks caused by chaotic rollouts around the world has triggered a backlash among local residents over issues of safety and unsightliness.
But none of that seems to have slowed their popularity with users. Tier boasts that it has seen 10 million rides since it launched less than a year ago. It now operates in more than 40 cities and is looking to rapidly expand, thanks to this new round led by Mubadala Capital and Goodwater Capital.
“With their deep experience supporting consumer tech entrepreneurs around the world, they will help us accelerate our expansion plans, bringing the mobility revolution to the largest possible number of users worldwide,” said Lawrence Leuschner, CEO and cofounder of Tier Mobility, in a statement about the new investors.
According to CB Insights, microbility startups (bikes and scooters) have raised more than $5.7 billion over the past four years. That’s led by U.S.-based Lime, which has raised $765 million, and Bird, with $548 million. Tier previously raised a $29 million round of funding.
The latest round also included money from AXA Germany, Evli Growth Partners, White Star Capital, Northzone, Speedinvest, Point9, Indico, Kibo Ventures, and Market One Capital.
Many doubt that micromobility services can evolve into sustainable businesses, given competitive pricing that often causes them to lose money on each ride and the capital-intensive nature of rollouts.
Tier Mobility says it is continuing to develop its electric scooters to make them more durable while reducing costs and hopefully moving toward a more sustainable model.
Still, with Lime rapidly expanding across Europe, and nearly a dozen other scooter companies receiving some kind of funding, Tier faces a challenging landscape that will likely require additional and much larger capital infusions in the months to come.