Bird, a scooter-sharing startup, raised $275 million in series D round of funding, at a $2.5 billion valuation. The company’s CEO, Travis VanderZanden, shared this information yesterday at TechCrunch’s annual Disrupt conference.
According to CrunchBase data, the company has raised $548 million since its founding in 2017. Series D, led by Canadian asset manager CDPQ and Silicon Valley venture firm Sequoia Capital, provided Bird with a much-needed cash infusion.
Earlier this year, Quartz shared a report based on the use of Bird scooters in Louisville, Kentucky, which revealed that the average lifespan of these vehicles was just 28 days. Soon after, the company CEO admitted to The Verge that scooters need to stay on the streets for at least six months for the company to break even.
Due to excessive vandalism and frequent instances of electric scooter impoundment by local law enforcement forces, Bird had lost nearly $100 million during Q1 of 2019. This loss shrank the company revenue to approximately $15 million and left it seeking $300 million in the next round of funding, according to The Information. In the spring, the Santa Monica-based startup was down to about $100 million in cash.
At the time, VanderZanden shared his plan for keeping the company afloat. It involved branching out beyond the U.S. and Europe by selling electric scooters to local entrepreneurs who would incur all the maintenance and operational costs. Bird would provide them with advice and technical support to get started and then take a small percentage of each scooter trip.
This move, paired with the release of two new models of higher-quality scooters, has attracted venture capital firms once again. Bird One hit the streets in May and is said to have an average lifespan of 15 months, which is more than enough time for the company to cover costs and make a profit. The release of Bird Two took place in August.
Since the company no longer operates with off-the-shelf Chinese scooters and produces its own vehicles instead, it has emphasized on unit economics and managed to raise most of the capital it needs to keep going.
“Positive unit economics is the new goal line,” VanderZanden said in an emailed statement to Quartz. “As a result, we pivoted from growth to unit economics as the top priority for the company. Now with the best unit economics in the industry, new Bird investors such as CDPQ see that we are paving the road for a long term sustainable and healthy business.”
In unit economics, companies focus on the costs and revenue associated with a single unit of products. In Bird’s case, the company will track how much revenue each scooter brings in. If the new scooter models can make more trips and cover more miles than previous ones and can outlast the six-month mark, the company will become profitable.