February 19, 2020

What's next in Europe's scooter wars?

City tenders, operational costs and funding fatigue could all kill European scooter startups this year. But will they?

Amy Lewin

8 min read

Last month, Europe saw its first big electric scooter acquisition: German startup Circ was taken over by US competitor Bird. 

On the face of it, that merger might seem like bad news for the other contenders on Europe’s scooter battlefield — the biggest being US company Lime, Swedish startup Voi and German startup Tier. 

Yet Tier and Voi remain bullish on their chances to survive — and thrive — this year. 

“It’s not really threatening; Bird and Circ are not leading in any markets,” says Fredrik Hjelm, cofounder of Voi. “Lime is leading in most markets.” 


“I feel like we’re in a good position now,” adds Hjelm; Voi is now operating in around 40 cities in Europe and claims people have taken more than 16m rides on its scooters. “Perhaps we’re drinking too much of our own Kool-Aid… but it feels good. We’ve made senior hires, the hardware is performing really well and we’ve had good success in the city licensing processes.” 

Lawrence Leuschner, cofounder of Tier, is also feeling perky. Between December and January, Tier expanded into 15 new markets (it is now in 56 cities in Europe, 33 of which are in Germany) and the company claims that 17m rides have been taken on its vehicles since launching in October 2018 (two months after Voi).

This year, both companies’ success, or failure, will centre on several key questions: 

  • Can they win city tenders? 
  • Can they reduce operational costs? 
  • Can they expand into new product lines which help with either of the above? 
  • Can they raise more money if (or more likely, when) they need it?
  • How much impact will new entrants or mergers have?

Winning city tenders

Across Europe, cities are trying to rein in scooter operators, and figure out the best way to regulate this new mobility market. 

Many are putting scooter operations out to tender, and asking companies to make a case for why they would be a trustworthy and safe service provider. 

Some cities have chosen just a handful of operators; Marseille, for example, awarded a year-long contract to Voi, Bird and Circ to each place 2,000 scooters in the city in October. Others have split tenders between far more providers; Copenhagen has chosen 10 operators to each provide 3,000 scooters. 

Fredrik Hjelm, Voi cofounder and chief executive.

The jury is out on which model works best (Hjelm is firmly in favour of Marseille’s approach) — but either way, it’s becoming increasingly important for scooter startups to win these licences. Voi has several tenders ongoing, including for Grenoble in France, and has been awarded 11 licences to date. 

Leuschner says the best way to get cities onside is to show them the data. City authorities want reassurance that operators will provide a safe, well-managed service that will help, not hinder, its transport network. Tier riders have suffered no fatal accidents to date, Leuschner says, adding that Tier limits all scooter rides to 20km/hour (less than the required speed limit in some markets) and insures all drivers. 

All eyes on Paris

When it comes to scooter regulation, the approach taken by Paris (and mayor Anne Hidalgo) is receiving a lot of attention. This summer, the city is expected to decide which three scooter operators it will grant a licence to provide their services in the city. (The tender process closes in March.) 

Paris introduced scooter parking spaces last year.

Providers will be assessed on user safety, operations and environmental responsibility. Lime, Dott, Voi and Tier are all submitting tenders, amongst others.

It’s a key contract for anyone looking to conquer the French market.

“It’s so binary in France, compared to Germany,” says Hjelm. “In Germany, you can have a bad start and catch up; in France, you either get licences and they’re worth a lot — €100ms — or you don’t get them and you have to shut down your French operations.” 


For Dott, one of the smaller operators, the contract is “very important”. Amsterdam-based Dott is active in just five markets in Europe (Paris, Brussels, Lyon, Munich and Turin) and is focused on becoming a leader in each of them (and making each city profitable).

“We are confident [about the Paris tender] but remain cautious, focusing on daily execution, being the most reliable partner for the city of Paris and offering the best mobility service for our users,” Dott says.

Lawrence Leuschner, Tier cofounder and chief executive.

Leuschner argues that while the contract is important, it is still only one city in France. “Paris is a big city — but there’s a 5,000 scooter limit. We’d like to win Paris, but life won’t end there,” he says. 

The UK

The UK is seen as another interesting location on the scooter battlefield — mostly because they aren’t yet legal on the streets. 

Last month, however, The Times reported that the UK government will imminently launch a consultation to look into how to regulate scooters and that trials in UK cities may follow.

But it’s far from certain that scooters will be legalised in the UK.

“The press got overexcited,” says Hjelm. “We’ve seen a few articles like this in the last two or three years. My experience is that consultations take quite a long time — and decisions even longer.” 

Tier is more hopeful. Its recently-appointed chief operating officer Roger Hassan is based in its small UK office — and says he’d be disappointed if he didn’t see scooters on UK streets within the next year. If the government does run trials, however, he reckons they won’t be in London, but in slightly smaller cities. 

Chopping operational costs

If 2019 was the year of scooter hyper growth, 2020 will be the year of unit economics. 

“We’re super focused on unit economics and getting to profitability in all markets,” Hjelm told Sifted when Voi raised a Series B round of $85m last November. “The first year was all growth, growth, growth. Now we’re investing in tech.” 

Investors will only continue to back loss-making businesses for so long (as Circ discovered) so scooter startups need to start demonstrating that they can make every ride profitable. 

Leuschner says that Tier is already most of the way there. 

Tier's electric cargo bikes are used to replace scooter batteries.

80% of Tier’s fleet now have swappable batteries (an in-house operations team ride electric cargo bikes around cities to replace batteries when needed). With swappable batteries, “every ride is profitable,” says Leuschner. 

It’s also boosting its bottom line (and reducing its carbon footprint) by refurbishing and selling on older vehicles (without swappable batteries). More than 3,000 of Tier’s old units have been sold for €699 each, with a one-year warranty and helmet thrown in.

We can refurbish every scooter.

“We can refurbish every scooter,” says Leuschner; the only vehicles that can’t be sold on are those which have been seriously vandalised.

Voi, meanwhile, says it reached seasonal profitability in several core markets last year and aims to get to full-year profitability in most markets this year. 

Wooing investors

When the WeWork debacle happened last year, investors quickly became wary of startups burning their way through a lot of cash — and scooter companies this side of the Atlantic felt the repercussions. “Sentiment shifted a bit after last fall,” says Hjelm. 

But Hjelm reckons that raising capital this year shouldn’t be a problem for Voi. “This space is growing so fast — if we can show a clear path to profitability and improved margins, I’m confident [we can raise money].” 

‘In 2021 we should break even,” Hjelm says, adding that “we might need a capital injection before then”.

Tier now employs 450 people.

Leuschner also says it’s likely Tier will be out to raise again this year, hinting that this would fund new services or products, rather than bankroll its scooters. (In January, Tier bought Pushme, a UK-based replaceable battery recharge network, giving some suggestions as to what territory it might bite off next.)

Paul Murphy, a partner at Northzone and board member of Tier, says he feels “very good” about his investment in the company — and wouldn’t have funded it four times in 12 months otherwise.

New players — or acquirers?

If raising money weren’t to pan out as planned, some of Europe’s scooter operators may have to look for a buyer. 

The big US players might have been interested once (both Lime and Bird have raised far more capital than the European operators). But, with its acquisition of Circ, Bird is not likely to stump up the cash for another European scooter startup. Lime, which has been laying off staff across several markets and struggled to raise its last round of funding, is also not looking likely to acquire other businesses any time soon. 

More traditional transport operators — like train or car companies — are other potential buyers. 

Ford, for one, is interested in micromobility. In 2018 it acquired scooter startup Spin — and this year, it’s expanding to Europe. Spin is currently hiring in Germany, France, Italy, Spain and the UK.

To acquire [Voi] or Tier you’d need a big balance sheet currently.

But if another car company fancied taking on Ford in the micromobility space, it would need to cough up a lot of capital. “To acquire us or Tier you’d need a big balance sheet currently,” says Hjelm.

“There will be more consolidation, but I don’t really know when,” Hjlem adds. “The licences will be a trigger for that.”

Amy Lewin

Amy Lewin is Sifted’s editor and cohost of Startup Europe — The Sifted Podcast , and writes Up Round, a weekly newsletter on VC. Follow her on Twitter and LinkedIn