LimeBike, which operates a fleet of lime-green colored bicycles that connect to an app to track their location and collect mobile payments from users, announced today it raised a $50 million Series B round of financing led by Coatue Management. The San Mateo, California-based company is using the funding to expand and maintain its bike-sharing service nationwide as it takes on well-financed competitors.
Kyle Lui, a principal at previous LimeBike investor DCM Ventures, said the firm participated in the latest round because “we’re excited about the growing trend” of dockless bike sharing. “This is an exciting opportunity.”
DCM Ventures joined the Coatue-led round, alongside previous investor Andreessen Horowitz as well as AME Cloud Ventures, Franklin Templeton Investments, GGV Capital, Section 32 and the Stanford-StartX Fund. LimeBike has now raised $62 million in total funding.
Lui said the bike-sharing sector is heating up since it provides an affordable last-mile transportation alternative for city residents and visitors alike, who are looking to travel a couple of miles at a time.
He acknowledges there is serious competition in the space. Beijing-based Mobike, which supplies bikes with orange-colored rims, has raised $925 million from Tencent and Sequoia Capital, among others, and it is looking to expand in the United States. This fall, Mobike launched its service in Washington, D.C.
Another rival, Beijing-based Ofo, with its yellow-framed bikes, has raised $1.3 billion from Alibaba, Atomico and Matrix Partners China, among others. It is also eyeing more of the U.S. bike-sharing market, as it competes in Seattle, for example, alongside LimeBike and Spin. San Francisco-based Spin, which operates a fleet of orange-colored bikes, has raised $8 million from lead backer Grishin Robotics and other investors.
All of the companies provide bicycles that are outfitted with GPS tracking technology that users access with their mobile phones. They then unlock the back wheel by scanning or typing in the plate number. Lui says LimeBike is the largest dockless bike-sharing operator nationwide, with about 10,000 bikes on the streets. It is available in 20 markets (in 12 cities and eight university campuses). LimeBike rides cost $1 for 30 minutes or 50 cents for students.
In the Bay Area, LimeBike is available in South San Francisco and rolled out in Alameda earlier this month. Lui says there is no cost to the city in the form of subsidies.
“We believe LimeBike has an advantage over the well-capitalized competitors from China,” Lui said. “LimeBike is based here in the states. It knows this market, and we believe it is better equipped to hire local talent and expand.”
Lui said LimeBike CEO and co-founder Toby Sun knows the U.S.-Chinese market, having previously worked as an investor for Fosun Kinzon Capital, a $400 million cross-border firm that invested in such tech companies as StyleSeat and GrubMarket.
Although for-profit bike sharing businesses like LimeBike and others are popping up in towns and on campuses all over, corporate-backed bike sharing is not new. Citi Bike is a privately owned public bicycle sharing system serving New York City and Jersey City with blue-colored bikes. Launched in 2013, Citigroup is the main sponsor.
The Ford Motor Company’s GoBike program recently expanded its services in San Francisco and launched in the East Bay in June. Prior to GoBike’s recent expansion, San Francisco transportation officials voted to hold off on funding the program with $255,000, citing conflicts with city bike-rental shops.
Unlike LimeBike and other dockless bike-sharing operators, in which riders park the bikes in any location where another user can find it, Citi Bike and GoBike require renters to park the bikes in designated docks. By the end of next year, GoBike hopes to have about 550 docking stations in the Bay Area for its powder-blue bikes.
Maintaining the assorted fleet of colored bikes will certainly get expensive, which is one reason why LimeBike raised more money. Although ride-sharing bikes are durable for ordinary use, featuring puncture-proof airless tires and anti-rust frames, reports in the Bay Area have surfaced showing vandalized bikes, including one GoBike thrown into Lake Merritt and another hung from a tree. In China, people have dumped shared bikes in huge piles.
Over the weekend in Seattle, this reporter didn’t see any damaged shared bikes. That’s a utopia that Lui hopes will spread to other cities.
“LimeBike really has the potential to solve that last-mile human transportation problem—and do it cost effectively and with very low friction,” he said.
Photo of a LimeBike, a dockless bike-sharing service, in Seattle, by Alastair Goldfisher.