LimeBike, one of the many startups hoping to steal a march in the crowded bike-sharing market, is today taking its first step to scale internationally. The Bay Area-based company — which lets people use an app to find and ride “dockless” bikes for $1 for 30 minutes (or $0.50 for students) and then leave them parked on sidewalks for future customers to use — is expanding to Europe, with a launch of 500 bikes each in Frankfurt, Germany and Zurich, Switzerland.
Rides will be charged at either 1 Swiss franc or 1 euro for 30 minutes, the company said.
The move comes two months after LimeBike raised $50 million in funding on what we have heard was a $225 million valuation, and some decent growth in a competitive market. LimeBike, as of this weekend, passed 1 million total rides, with more than 10,000 riders each day using LimeBike’s distinctive green cycles across some 30 cities.
But it’s a very long, and uphill, ride for bike-sharing companies, which have to some extent been following the Uber/Lyft model for growth: raising outsized amounts of money to build out operations across a wide number of markets, and running those operations at very competitive, potentially subsidised-to-stay-cheap, prices to develop regular customers.
To put LimeBike’s financials into some perspective, Ofo and Mobike, two of the bigger players out of China — where there are several more bike sharing startups already competing — earlier this year respectively raised over $700 million and $600 million. Both companies are valued between $2 billion and $3 billion, and are using their coffers to expand aggressively into LimeBike’s backyard.
LimeBike itself is not sitting still either. The company said that this month it is its fleet in the US to 50,000 bikes, up from its current size of 10,000, to meet demand, along with a ramp up of servicing staff, and an app update to provide better parking and riding guidance.
The contrast between bike-sharing companies raising outsized rounds and those that are finding it hard to do the same has resulted in a number of casualties, and with the privately-backed outfits often also competing against schemes underwritten by cities themselves, it makes for a tricky market.
On the positive side, unlike ridesharing startups, bike startups do not have the larger issue of maintaining two-sided marketplaces, since the passengers of their bikes are, in fact, the drivers. On the other hand, they also have a different cost model. The Ubers of the world generally do not own the vehicles in their fleets, but the bike companies not only own their cycles but have to have a fleet of people on hand ready to service and maintain them.
And for now, on a purely selfish consumer level, it’s translating into a interesting opportunity for people living in dense urban areas, giving many choices to those who may be looking for alternatives to private vehicles, public transportation and walking; and for investors and the transport industry to see if this model has what it takes to keep up momentum and keep moving.