Lime announced a new $170 million funding round led by Uber, the scooter company announced on Thursday. Alphabet’s venture arm GV and Bain Capital also participated in the round, Lime said.
As part of the deal, Lime will acquire Uber’s bike and scooter business, Jump. The scooter-sharing company’s CEO, Brad Bao, will be replaced by global operations head (and former chief of staff to Uber CEO Dara Khosrowshahi) Wayne Ting. Bao will continue as chair of Lime’s board.
The news of the funding round was first reported by The Information, which also noted that the deal would value Lime at $510 million, a 79 percent drop from its previous valuation.
The financing news comes at a time of extreme upheaval for the scooter-sharing industry due to the COVID-19 pandemic. Lime pulled its fleet of electric kick scooters from 99 percent of its markets around the world. As its revenue dried up, the company said it would lay off about 80 full-time employees, or about 13 percent of its global workforce.
Lime also laid off 14 percent of its staff and exited 12 markets in January before most of the COVID-related shutdowns went into effect in an effort to help the company achieve profitability.
“Micromobility will be vital to the new world affected by COVID-19 and we are already seeing this as cities begin to move again,” Ting said in a statement. “With our new financing and expanded offerings, we are strongly positioned to meet the needs of riders in a safe and reliable way.”
The scooter startup isn’t the only on-demand transportation company to experience challenges during the pandemic. Lyft laid off 17 percent of its workforce last week, Uber cut 14 percent of its staff earlier this week, and rival scooter company Bird laid off about 30 percent of its staff last month. Amid all this turmoil, Lime acquired the assets of defunct electric skateboard startup Boosted.
Uber already has a minority stake in Lime, having led a $335 million investment round back in 2018 when the scooter boom was at its zenith. Since then, scooters have spread across the globe, even while the companies that operate fleets have struggled to rein in their cash burn. In recent months, venture capital investment has dried up as the companies’ unit economics were slow to improve.
By absorbing Jump, Lime will help Uber shed a sizable portion of Uber’s cash losses. Last year, the ride-hailing giant pulled its bikes and scooters from several markets amid record losses. Uber has followed the rest of the bike and scooter industry by raising prices and adopting a per-minute charge, making longer Jump bike rides more expensive but very short trips more affordable.
According to The Information, Uber will have the option to buy Lime between 2022 and 2024 at a specific price. In the meantime, Lime’s scooters will be available to rent in Uber’s app, and vice versa with Uber’s Jump bikes and scooters in Lime’s app.