for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

E-scooter startup Tier raises $250 million to expand, build charging network

BERLIN (Reuters) - Berlin-based e-scooter startup Tier Mobility said on Tuesday it had raised $250 million from investors to expand operations beyond the 80 cities in 10 countries it covers and launch new ways to get around town.

FILE PHOTO: A user rides an e-scooter from provider Tier in a pedestrian area in Frankfurt, Germany, August 6, 2019. REUTERS/Kai Pfaffenbach/File Photo

The Series C funding round, led by SoftBank Group Corp’s Vision Fund 2, will also fund the development of Tier’s own charging network that is part of CEO and co-founder Lawrence Leuschner’s drive for emissions-free urban mobility.

Kick scooter startups have earned a bad reputation in many cities, being blamed for two-wheelers strewn along sidewalks and for adding the job of “juicer”, those who are responsible for charging and distributing them, to the low-income gig economy.

But, Leuschner told Reuters, designing scooters with swappable batteries has made operating Tier’s fleet of 60,000 scooters more efficient and less disruptive. The two-year-old startup has made money at the operating level since the summer.

Now, after a successful pilot project in Finland, Tier is launching its Energy Network: Under the scheme, retailers install a wall charger while riders can exchange batteries and get a free trip as a reward.

“The city loves it - they don’t need to dig holes and invest in their own charging network,” Leuschner told Reuters in an interview. “Stores love it - they get additional footfall and an average additional $1,500 a month in revenues.”

Leuschner said Tier planned to branch out into other forms of micromobility but declined to say which, while it would also consider acquisitions.

In addition to the equity round, Tier is in talks on raising a $50 million debt facility secured against its fleet of scooters, which it typically run for three years before selling them on.

Such financing aligns liabilities to assets while reducing funding costs, and has already been used by German startups including car subscriptions company Cluno and Grover, which rents out second-hand consumer electronics.

Existing investors, including Mubadala Investment Company’s financial investment arm Mubadala Capital, Northzone, Goodwater Capital, White Star Capital, Novator and RTP Global, participated in the funding round, Tier Mobility said.

Including the fresh funding, Tier Mobility is valued just below $1 billion, the Financial Times here reported earlier, citing people briefed on the terms. Tier has overtaken Lime to become the second-most valuable e-scooter company after Bird.

Additional reporting by Radhika Anilkumar and Kanishka Singh in Bengaluru; editing by David Evans

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up