Scooters – The Most Unusual Success Story Of The Year
FN Media Group Presents OilPrice.com Market Commentary
London – October 30, 2019 – The next multi-billion-dollar Uber might have only 2 wheels. Scootermania is turning micro-mobility startups into multi-billion-dollar unicorns. This industry segment has been attracting cash and customers like no other. That’s because micro-mobility has the potential to compete with cars and ride-hailing. It is also part of the answer to ailing public transportation because it will get people there. Mentioned in today’s commentary includes: Baidu, Inc. (NASDAQ: BIDU), Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), The Boeing Company (NYSE:BA), Niu Technologies (NASDAQ:NIU).
That’s revolutionary talk. And that’s why investors are pouring money into it. They’ve pumped more than $5.7 billion into micro-mobility startups since 2015.
Scooter startup Bird is only two years old, but it’s already worth $2.75 billion. Just this month, it raised $275 million in fresh funding. In February, giant Lime raised another $310 million to push its valuation to $2.4 billion.
It’s a crowded space, but that doesn’t seem to bother venture capitalists who keep throwing down cash for what they seem sure is the next revolution in urban transport. But one little-known upstart is seeking to turn that chaos into order and transform the micro-mobility industry. And their potential to disrupt the multi-billion-dollar ride-share market cornered by Uber and Lyft is clear.
When you add a seat for the first time, and Bluetooth capabilities, the OjO is a scooter like no other.
#1 The Best Moment in the Micro-Mobility Craze
The total mobility market is now worth $7 trillion. We’ve ditched ‘gigantism’, and the new global obsession is micro-mobility. It’s a craze of global proportions:
The global micro-mobility market is expected to reach nearly $32 billion by 2029. By 2050, it’s likely to be two-thirds of the world’s population. And it’s the first mile and last mile of getting people to mass public transportation that’s the biggest problem.
Micro-mobility is the definitive answer. It can effectively replace many personal car and ride-hailing trips as well as deliver first- and last-mile solutions for public transit. And OJO Electric knows this too well.
In China alone, micro-mobility has nearly doubled accessibility to jobs, education and health care.
That’s why even tech giants like BAIDU (NASDAQ:BIDU) are on board. Back in 2014, the internet megalith launched its own wildly popular smart e-bike, called DuBike., and it hasn’t stopped innovating since.
Now, it’s even taking on the automated car market. With more miles under its belt than any of its competitors in Beijing, it’s an easy choice for a number of investors.
Niu (NASDAQ:NIU) is another Chinese company taking the micro-mobility market by storm. it’s already become one of the country’s most exciting new micro-mobility firms.
Founded in 2014, Niu has quickly climbed the ranks to become the world’s top provider of urban mobility solutions, essentially creating the market for these types of vehicles.
Since listing on Nasdaq just last year, it has performed significantly better than some of the other super-hyped IPOs in the sector, and it’s showing no signs of slowing.
#2 Any Resistance Ends Here
The early e-scooter entrants, despite all the VC cash poured into them and huge valuations, have been met with a fair amount of backlash and growing pains. They can’t travel far. They irritate pedestrians in crowded places. Cities hate them. They don’t feel safe, and they’re definitely not comfortable.
This is where a seat can make a billion-dollar difference. It’s where some innovative technology and engineering can turn city officials into a business’ best friends.
OJO (OJO.V-AZNVF) has taken the giant growing pains of hyper-valued companies like Bird and Lime and turned them into the biggest potential in the segment. And they seem poised to beat out the biggest players in the market on safety, sustainability, distance and comfort.
OJO is already partnering with bike operators and docking stations in cities around the U.S. They’re working directly with city officials to turn chaos into order.
What cities might like most when it comes to order versus chaos is this: The innovators at OJO one of the few scooter companies to have added Bluetooth speakers with audio alerts and ability to make a scooter automatically slow down in school zones or on campuses.
It’s a winning combination from a safety perspective–so cities are definitely on board.
#3 The Scooter that Could Disrupt Uber and Lyft
Uber and Lyft should be worried. The average Uber or Lyft ride is about 5-15 miles.
That blows the average scooter out of the water, and even threatens Uber and Lyft. The average scooter ride is about 0.6 miles. OJO’s average is closer to 2 miles. And at the upper end of 10-15 miles, there are no scooters out there that can compete. And the economics are trail-blazing.
Right now, OJO is looking at about $15 per day, per scooter. Right now, they’ve got 200 on the road, but a big push is underway which should ramp up revenue in Q4.
They will be increasing total deployment to 1,250 in November and by the end of the year OJO anticipates having 2,500 scooters deployed. That’s nearly $14 million revenue run rate.
Next year, they’ll come out with an even newer 2020 model, and plan to have up to 15,000 on the ground. That’s over $80 million revenue run rate.
And they’re about to go public after just completing a $6 million raise. That raise will get them through the production and deployment of 2,500 new scooters. What will the venture capitalists like most here? The differentiated economics. As we’ve said, they’re already throwing tons of money at this segment, despite all the drawbacks.
Bird and Lime have been criticized for moving too quickly and blowing through VC money in a heartbeat. OJO is methodical. It’s putting out a model that will scale, recoup and last a long time.
#4 The Mojo Behind the OJO
It’s not sustainable to just throw a ton of scooters on the street and see what happens. OJO (OJO.V, AZNVF) watched and determined where the competition was failing, badly. OJO is a design-first company founded by a group of wildly successful inventors, designers and consumer goods entrepreneurs.
They include Don Ratner, OJO director, who has brought over $1 billion in famous toys and licensed goods to market for everyone from Disney and Nintendo to Coca-Cola and Mars. OJO plans to disrupt the disruptors, and they’re disciplined enough to do it. For one, they’re ready to capitalize on the scooter blitz chaos that Bird and Lime helped create. The executive management includes CEO and Director Max Smith, who has successfully raised capital and driven business growth through eight major exits, including for World Color Press, LinkShare, blip, Gartner’s Tech Republic and JASH, among others.
They’re partnering with Fiore Group, the pre-eminent merchant banking group behind market successes like Lithium X Energy and Lionsgate Entertainment, to go public this quarter, filling a gap in the equities markets with a pure-play offering of access to the massive growth of the micro-mobility sector.
#5 Massive Upside Potential
The mobility market is constantly evolving, and even giant companies like General Motors, Ford, and Boeing are getting involved.
General Motors (NYSE:GM) has created its own brand of electric bikes, called Ariv. The bikes were just launched this year, but have already captured the attention of the European market. While they err on the side of pricey, coming in at $3,800 per unit, they do boast a high top speed and can travel a modest distance on a single charge. The kicker for many, however, is that they can fold into an easily carriable pack, making them the perfect choice for a lot of commuters. Especially in big cities like London or Berlin.
Ford (NYSE:F) is taking a different approach. It’s swooped right into the scooter market, buying Spin for a clean $100 million. Initially deployed in San Francisco back in 2017, Spin is widely considered to be a part of the Big Three of the scooter world, along with Lime and Bird. While Ford’s buyout of Spin made headlines, it’s certainly not the first urban transportation alternative Ford’s sunk its teeth into.
And Boeing (NYSE:BA) is looking to take it to the next level, literally. Recently, it signed a deal with Porsche to create an automated flying taxi. This is significant because both companies are leaders in their respective fields. And while other flying taxis have been conceptualized in the past…none have the market presence – or experience – that Porsche and Boeing have.
While still in the early stages, Boeing and Porsche hope to identify a market, define the use cases, and create a product that will solidify their places as royalty in this new market.
OJO is going head to head with these giants. And it has significant promise. Where Bird and Lime were two years ago, OJO is now. They’ve already launched in Austin, Dallas and completed a pilot in Hoboken, New Jersey. Ojo launched in Memphis, TN this week and are also in discussions with San Antonio, Portland, Washington, DC, Nashville, Atlanta, Seattle and more.
Bird’s wings have been clipped a bit, and while that hasn’t stopped it from hitting a $2.75 billion valuation, there’s no upside left.
OJO (OJO.V, AZNVF) is a better beast all around, and when you have startups in this space turning into unicorns in a matter of months, the upside for a scooter company ticking all the right boxes is incredible.
By the end of the year, their scooter deployment may be 10x current levels, and voracious venture capital may have already grabbed a big chunk of the upside. And by 2020, if they reach their goal of 15,000 scooters across the US, that upside might be gone entirely.
This is where Tesla meets Vespa and eats a Razor for lunch. In a segment that’s minting unicorns at record speed, the startup with a phenomenally more innovative product could hit unicorn status even faster.
By. Ian Jenkins
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