Europe’s electric scooter market is heating up even as the U.S market continues to falter amid the pandemic. Institutional investors are increasingly jostling for positions in the burgeoning segment that threatens to transform the traditional transport industry.
E-scooter Financing Deals
The biggest beneficiaries of increased institutional investor’s interest are rental startups that continue to rake up cash in financing deals. In recent months, German operator Tier has closed a $250 million in a financing deal led by Softbank. The funding round has since propelled the company’s valuation to nearly $1 billion.
Swedish Firm Voi is also eliciting investor’s interest, having raised $160 million in recent days in a mix of equity and debt financing. Amid the wave of financing, European firms now appear to occupy the top spot when it comes to valuation. German Tie is currently rated as the second most valuable e-scooter company.
The hype around the U.S e-scooter market appears to have fizzled in recent years after peaking in 2017 and 2018. Bird and Lime, which were the poster child of the burgeoning sector, have come under pressure in recent years, with the pandemic exacerbating the situation. The pandemic hit the scooter-sharing business in the U.S. In contrast, the pandemic has been the catalyst in some countries, conversely accelerating adoption.
Bird and Lime have already had to suspend operations in key markets, a move that has also resulted in the laying off of hundreds of staff as part of cost-cutting measures. With the pandemic showing no signs of fading away, Lime has seen its valuation plummet by more than 79% to $510 million.
As it stands, investors are more confident about the European e-scooter market going by the $687 million injected this year alone. The increased investments stem from the friendly regulation that continues to spur growth in the sector. Friendly regulation, as well as increased government spending, has all but continued to fuel growth in the European e-scooter market.
Investors are also eyeing investment opportunities in European e-scooter startups partly because they are leaner and supported by better economics. For instance, Tier and Voi have been profitable, even as the pandemic continued to take a toll on most businesses. U.S Lime also seems to be bouncing back after coming under pressure amid the pandemic. The U.S e-scooter managed to reach profitability in the recent quarter.
VanEck Investment Bonds
Separately VanEck has moved to enhance investor’s access to investment-grade bond exposures. The firm has unveiled two new corporate bond exchange-traded funds. VanEck Vectors Moody’s Analytics IG Corporate Bond ETF and the VanEck Vectors Moody’s Analytics’ BBB Corporate Bond ETF are the two new bonds.
The bonds seek to track the MVIS Moody’s Analytics US investment Grade Corporate Bond Index and the MVIS Moody’s Analytics US BBB Corporate Bond Index. The unveiling of the two investments corporate bonds also comes on the heels of the VanEck Board of Trustees approving the liquidation and dissolution of the VanEck Vectors Coal ETF (KOL)