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#12730
https://www.theinformation.com/articles ... -new-funds

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The gist of it is:
Bird lost over $100m in the first quarter of 2019.

Bird told existing investors recently that, over two four-week periods in May, June and July, the newer versions of its scooters, known as Bird One and Bird Zero, pulled in more revenue per ride on average than the company had to spend on repairs, replacement, insurance, payments operations and charging costs. The contribution margin, or revenue that remains from each scooter ride after costs, for those four-week periods ranged from 15% to 30%, according to the company. The figures exclude R&D and general and administrative expenses such as staff salaries and stock payments.
Edmund liked this
#12732
Hit by Big Loss, Bird Seeks $300M in New Funds
By Cory Weinberg and Amir Efrati

The wintertime was bleak for Bird. In this year’s first quarter, the electric scooter operator lost nearly $100 million while revenue shrank sharply to only about $15 million, people familiar with the matter said. In the spring, it told people it was down to about $100 million in cash, even after raising more than $700 million over a year and a half.

It’s well known that scooter companies struggled in the colder months of the year, but the depth of Bird’s problems hasn’t been previously reported. Now, the company that unleashed the global scooter craze is trying to raise hundreds of millions of dollars more in venture capital by convincing investors that it has started to turn around, recording what one person familiar with the figures said was double-digit revenue growth each month since February. Prominent in its pitch is previously unreported internal data, obtained by The Information, that aims to show Bird’s new scooters are durable enough so that each ride makes money.

THE TAKEAWAY
• Bird lost nearly $100 million in Q1
• Internal data points to improvements
• Company seeks $200M to $300M from investors

Bird insists it has turned a corner. It says it has been slashing the costs it has to pay per ride to repair, charge, insure and replace its vehicles. That’s largely because the vehicles are heavier and made up of new types of components that make them more difficult to steal. The progress is renewing optimism among some current investors. The company is projecting solid growth in the summer months, when it expects to break even, excluding capital expenditures.

“After a lot of hard work and innovation over the winter, Bird has emerged in full force with spectacular growth across markets,” David Sacks, a Bird board member and general partner at Craft Ventures, said in an email.

Bird has been having conversations with investors about raising more money for several months, people familiar with the matter said. It has told potential investors it wants to raise $200 million to $300 million by the end of the summer. The company is seeking to raise at a higher price than its current $2.3 billion post-money valuation, which it attained last summer after less than a year of existence. Since then—when it was able to increase its valuation from $1 billion to $2 billion in just a few weeks between deals—the investment frenzy has cooled.

Many large funds, including SoftBank’s Vision Fund, have explored investing in scooter firms but have been worried about the potential size of the market and the durability of the vehicles, the people said. One Bird investor blamed negative media coverage for the growing difficulty to raise money.

“The scooter industry has the most uncertainty in consumer tech today. No one knows what’s going to happen,” said an investor in a rival scooter firm that also explored investing in Bird.

“Are cities going to allow it? Are the unit economics going to work? Will the payback period [for purchasing scooters] be two months and it will all work?”

"Bird executives have been open about the company’s decision to sacrifice growth to trim losses over the winter."

Bird executives have been open about the company’s decision to sacrifice growth to trim losses over the winter.
The pitch from Bird and other scooter operators: The key to financial success is improving the hardware, so that scooters require minimal repair and can survive for hundreds of rides before needing to be replaced. Bird is trying to overhaul its fleet by replacing scooters that break down easily with longer-lasting models. About 80% of its fleet—which CEO Travis VanderZanden has said is in the “hundreds of thousands” of scooters globally—is made up of these tougher, Bird-designed scooters, a person close to the company said.

In the third and fourth quarters of last year, Bird said it generated about $25 million and about $40 million in gross revenue, respectively, the person said. Net revenue was more than $20 million in the third quarter and about $25 million in the fourth quarter, this person said. Some of that gap was due to rider discounts, which Bird eliminated in the first quarter of this year, when it pulled in just $15 million in gross revenue. A year earlier, in the first quarter of 2018, Bird generated several million dollars in revenue when it was in few markets, said a person briefed on the matter.

Bird executives, including Mr. VanderZanden, have been open about the company’s decision to sacrifice growth to trim losses over the winter. After the $100 million loss in this year’s first quarter, Bird made several quick moves to reduce its cash burn. It laid off about 5% of its staff, including cuts to its government relations team. The company’s service was “paused” in 44 of its 103 North American markets, it told Portland, Ore., regulators in April.

As cash has run low, Bird also has been finding new ways to get more money in the door. It started requiring customers to pre-load money into Bird’s app rather than paying per ride. (Lime, a rival, has a similar process.) Bird also began selling its scooters to customers directly for $1,299, which required a $149 deposit for pre-orders. And other companies can buy Bird’s scooters, too, giving Bird a cut of revenue, an arrangement it has with a scooter rental company called Sherpa in cities like Los Angeles.

Bird told existing investors recently that, over two four-week periods in May, June and July, the newer versions of its scooters, known as Bird One and Bird Zero, pulled in more revenue per ride on average than the company had to spend on repairs, replacement, insurance, payments operations and charging costs. The contribution margin, or revenue that remains from each scooter ride after costs, for those four-week periods ranged from 15% to 30%, according to the company. The figures exclude R&D and general and administrative expenses such as staff salaries and stock payments.

Bird’s presentation to current investors, portions of which are analyzed below, contains detailed information on the company’s revenue and operational costs:

The sample: In the presentation to investors, Bird breaks down its revenue and costs on a per-ride basis using two four-week periods of average usage from May 6 through June 2 and from June 10 to July 7 this year. The data only reflects use of the Bird One and Bird Zero scooters, the majority of Bird’s global fleet.

Revenue: Gross revenue for each ride ranged from $4.12 to $4.27, up from the $3.65 that Bird told investors last year. That is likely due to Bird’s increase in prices in April, which shot up in some cities to 30 cents from 15 cents for each minute of riding. The cost to start a ride has typically stayed at $1. Net revenue from each ride in the samples ranged from $3.72 to $3.82 because of discounts.

Depreciation: Bird’s largest cost per ride is depreciation, or the decline in value of its scooters. Depreciation, as calculated by the company, is a four-week trailing figure taking the total depreciation expense for that time and dividing it by the total number of rides, a person familiar with the matter said. Currently, that figure ranges from $0.94 to $1.17 per ride, or about a quarter of revenue for each ride, Bird says. That implies the scooter would last between 550 and 650 rides before needing replacement, which is about six months of use, assuming each scooter is ridden about three times per day. That calculation is based on the total cost of manufacturing, transporting and paying the import tariff for each scooter, which is $660, a person familiar with the matter said. Bird also includes what it calls “accelerated depreciation” in its calculation, in which the company writes off the remaining value of scooters that are stolen. That accounts for the bulk of the improvement in depreciation cost, another person said.

Payments and insurance: About 25 cents, or 6% of pre-ride gross revenue, goes to payment processing fees and insurance. Last May, that figure stood at 46 cents. Executives at other scooter firms caution that Bird likely has difficulty knowing the full extent of its potential insurance costs in the four-week sample it used because of larger claims that could come later. But Bird executives have told people that scooters see fewer at-fault collisions than in ride-hailing.
Charging: To charge each vehicle, Bird says it pays between 79 cents and 93 cents per ride, or roughly a fifth of per-ride revenue. That’s down from $1.30 last May. Assuming the company pays its independent contractors $5 for each charge, the figure would imply that Bird charges each vehicle once every five or so rides, or roughly every 10 miles. That suggests Bird isn’t making use of the 30 miles or so it says its scooters’ batteries can last. Chargers often need to move scooters to different parts of cities, which drives up costs.

Repair: To repair each vehicle, Bird says it pays 32 cents to 44 cents per ride, or 8% to 11% of gross revenue. That’s down from 51 cents last May. Bird says it reduced costs even while hiring more expensive labor. In the spring, the company started hiring its own mechanics who work out of regional service centers, rather than relying on independent contractors.
Sc00tr liked this
#12733
Great find @Freebird!

Hard to believe Bird burned through $600M in 18 months. I agree the the new scooters will be more profitable but they will also be met with increased competition. Riders haven't been showing brand loyalty and continue to use the closest scooter to them.
#12748
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Burning through $1M a day sounds like a lot of fun.

My thoughts on this:

Bird has proven that purpose-built rental scooters bleed half the money as 1st gen personal scooters (M365, ES4)
The business model is doomed since they can't predict any day or formula that will make them profitable
They already have enough scooters in the pipeline (in factories and boats from China) to make their worldwide fleet 100% G2 heavy Birds (zero, one) in the next 60 days
They don't give a rat's ass about the old models and won't pay a cent ransom to Sheriff Cleatus who impounded them.
They would rather write off G1 scooters rather than retrieve them.
They are doing a better job of loss prevention and paying better bounties on the G2 tanks.
Lime already figured out most of this several months ago

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