The Station: Lime, AV Frameworks, and EV SPACs

The Station is a regularly published newsletter focusing on the world of transportation. Subscribe here — simply select The Station — and have it delivered to your email inbox each Saturday.

Hello readers, and welcome to The Station, a newsletter exploring both current and developing methods for moving people and goods between locations.

Let's move directly to the news. Numerous organizations aimed to release announcements prior to the Thanksgiving break, resulting in a substantial amount of information to process.

Feel free to contact me at kirsten.korosec@techcrunch.com with any feedback, suggestions, or insights. You can also reach out via direct message on Twitter — @kirstenkorosec.

Micromobbin’

The COVID-19 pandemic dramatically impacted businesses, with some sectors experiencing significant setbacks while others thrived. Micromobility companies initially faced challenges, but indications suggest a period of recovery is now underway. Lime is a recent example of this trend.

Lime announced this week that it has overcome the financial difficulties brought on by the COVID-19 pandemic and is currently demonstrating substantial profitability. This claim prompted Alex Wilhelm and myself to seek further clarification, as various accounting methods can be used to report profitability. The information we received from the company – acknowledging it is a private entity without public filings – proved more encouraging than anticipated.

Lime reported achieving both positive operating cash flow and positive free cash flow during the third quarter, a first for the company, and projects full-year profitability, excluding specific expenses (EBIT), for 2021. Generally, positive cash flow is a crucial milestone for a startup, signifying its ability to largely fund operations internally and reduce reliance on external investment for continued operation.

Lime also stated it “achieved EBIT profitability at the company level during the summer months.” The precise definition of “EBIT positive” is important. The company clarified that its calculation did not include share-based compensation, or it was using adjusted EBIT, a common practice among startups that removes the cost of share-based compensation from standard GAAP reporting. This detail slightly moderates the significance of the announcement.

Finally, the company anticipates achieving full-year profitability in 2021. TechCrunch requested further details regarding this projection, as the method of calculating profitability is a key factor. It was revealed that Lime’s projection is based on EBIT, rather than the more conventional metric of net income. While this approach is typical for startups, we will await more comprehensive GAAP metrics before definitively declaring Lime “profitable.”

Further Developments at Lime …

The company has introduced its fourth-generation scooter in Paris, engineered for a lifespan exceeding two years. The Gen4 scooter will be deployed throughout Europe in early 2021. A significant portion of the Gen4 development was conducted by engineers formerly with Uber’s Jump micromobility division. Lime refined the Jump team’s work, focusing on enhancing the scooter’s durability and incorporating components that can be reused from existing Lime scooters.

Lime also indicated that a “third mode” of transportation, in addition to bikes and scooters, is planned for the first quarter of 2021, alongside the integration of third-party companies onto its platform.

I suggest reading an article by TechCrunch’s European reporters, Natasha Lomas and Romain Dillet. They analyzed the ongoing urban changes in Paris, Barcelona, London, and Milan, specifically focusing on policy changes designed to prioritize pedestrians and cyclists.

Key highlights include Paris Mayor Anne Hidalgo’s initiative to create a “15-minute city” and Barcelona’s extensive pedestrianization project centered around the creation of “superilles” or “superblocks.”

I encourage you to find a comfortable setting and enjoy this in-depth analysis.

Additional Micromobility News …

Voi, a European electric scooter company, is integrating its devices with computer vision sensors to identify pedestrians and sidewalks. VentureBeat reports that this aims to help riders avoid collisions and adhere to local regulations.

Zipp Mobility, an Irish micromobility startup, is now operating in two towns in Buckinghamshire under a year-long trial program. The company is launching with 25 electric scooters in each location, with plans to expand the fleet to 300 scooters over the following two months.

Deal of the week

The surge in popularity of Special Purpose Acquisition Companies (SPACs) that began during the summer has extended into the fall and appears poised to continue throughout 2021. Companies focused on the development and sale of electric vehicles are showing a particular preference for utilizing this method to become publicly traded. Examples include Canoo, Fisker, Lordstown Motors, Hyliion, Nikola, and now Arrival.

Arrival, a previously lesser-known startup based in the U.K., operated discreetly for approximately five years before gaining significant public attention in January with a $110 million investment from Hyundai and Kia. It quickly became one of the most highly valued startups in the U.K., achieving a valuation of $3.4 billion.

Arrival’s objective is to manufacture electric vehicles that are price-competitive with those powered by traditional fossil fuels, and more affordable than other electric vehicles currently available. The company believes its modular electric “skateboard” platform – adaptable for use in various vehicle types – combined with its strategy of establishing microfactories, are crucial to achieving this competitive pricing. Currently, Arrival is developing two vehicle models: an electric van and an electric bus. Bus production is anticipated to commence in the fourth quarter of 2021, with van production scheduled for 2022.

The core of this agreement involves Arrival merging with special purpose acquisition company CIIG Merger Corp., resulting in a potential market valuation of up to $5.4 billion. Arrival secured $400 million in private investment in public equity, or PIPE, from investors including Fidelity Management & Research Company, Wellington Management, BNP Paribas Asset Management Energy Transition Fund, and funds managed by BlackRock. This will provide Arrival with approximately $660 million in cash reserves.

It is worth noting that the company was founded by Denis Sverdlov, who was also the creator of Roborace.

Image Credits: Arrival

Other deals that captured my attention this week …

Electric Last Mile Solutions, an electric vehicle startup headquartered in Michigan and founded by former Accuride and Ford executive Jason Luo, is reportedly in discussions to become a public company through a merger with Forum Merger III Corp., as reported by Bloomberg. The startup intends to produce over 100,000 vehicles annually at a facility in Indiana. Please note: the specifics of this arrangement have not yet been finalized.

Fenix, a new micromobility startup based in Abu Dhabi, has secured $3.8 million in a seed funding round led by Israel-based venture firm Maniv Mobility. This deal is noteworthy for several reasons. It involves the founders of Circ – Jaideep Dhanoa and IQ Sayed, who previously collaborated at Careem – and represents the first investment by an Israeli venture capital firm in a UAE-based technology company, according to Maniv Mobility founder and managing partner Michael Granoff. Granoff will be joining the Fenix board. Granoff communicated to me via email that this deal signifies a promising new era of collaboration within the Middle East, in addition to furthering the momentum toward sustainable and practical urban transportation.

Forto, a digital freight forwarder, has raised $50 million in a funding round spearheaded by Inven Capital, a growth fund originating from the Czech Republic. Additional investment was provided by Iris Capital, as well as existing investors Rider Global, Northzone, Cherry Ventures, Unbound (Shravin Mittal), and the Italian venture fund H14.

Gojek, the ride-hailing service, has received $150 million from Indonesia’s largest telecommunications network, Telkomsel. This is being presented as a “strategic partnership” and builds upon the existing relationship between the two companies. Since 2018, Gojek and Telkomsel have collaborated to subsidize the mobile data costs incurred by Gojek’s driver partners.

Lightning EMotors, a Colorado-based company specializing in fleet electrification, is in advanced discussions to go public through a merger with blank-check firm GigCapital3 Inc., according to Bloomberg. However, the deal is still progressing. GigCapital3 is aiming to raise approximately $100 million in new equity to facilitate a transaction that would result in a combined entity valued between $700 million and $1 billion, including debt.

Loadsmart, an on-demand digital freight platform, has secured $90 million in a Series C funding round co-led by funds managed by BlackRock and Chromo Invest. Strategic investor TFI International, a prominent player in the logistics industry, also participated in this round, as did Maersk, a global leader in oceanic shipping and a strategic backer of Loadsmart since its Series A round.

Ride Vision, an Israeli startup developing an AI-powered safety system designed to prevent motorcycle collisions, has raised a $7 million Series A round led by crowdsourcing platform OurCrowd. YL Ventures, Mobilion VC, and motorcycle mirror manufacturer Metagal also contributed to this round. The company has now raised a total of $10 million.

Strava, the platform for tracking activity and fitness data, has secured $110 million in new funding in a Series F round led by TCV and Sequoia, with participation from Dragoneer Investment Group, Madrone Capital Partners, Jackson Square Ventures, and Go4it Capital.

Election day mobility: scooters

Spin, a micromobility company owned by Ford, provided me with a compelling visual and several data points concerning its user activity on Election Day.

It’s important to note that this represents data from a single provider. We should avoid drawing broad conclusions or making unsupported assumptions. Consider this an intriguing observation regarding how certain individuals traveled on November 3rd, and one company’s approach to boosting ridership for voting purposes.

Spin documented a 31.45% increase in total ridership on Election Day compared to the preceding Tuesday. The company’s Spin to Vote initiative, which provided a $10 fare reduction for riders traveling to polling places on November 3rd, undoubtedly contributed to this increase in ridership. Spin reported that close to 3,000 riders utilized the Spin to Vote discount.

The cities experiencing the most significant gains in ridership on Election Day were Chicago, with a substantial 243% increase, Cleveland with 193%, San Francisco with 25%, and Atlanta with a 10% increase. Spin also monitored participation in its Spin to Vote campaign, finding that riders in Atlanta, Baltimore, Chicago, Cleveland, San Diego, and Washington, D.C. demonstrated the highest levels of engagement with the discounted ride offer.

Update: Lime has also shared their data with me, and published it on their blog. The company stated that the Lime to the Polls promotional code was used for 20% of all trips taken in the U.S. on Election Day. This figure represents a doubling of the percentage of trips utilizing the promotion compared to Lime’s initial Lime to the Polls campaign during the 2018 midterm elections.

What method of transportation did you use to reach your polling place? (for those who did not vote by mail)

Image Credits: Spin

Notable reds and other tidbits

Greetings, everyone. There’s a significant amount of industry news to cover.

The California Public Utilities Commission authorized two new programs on Thursday that will permit qualified companies to offer and bill for shared transportation using autonomous vehicles. While the industry generally welcomed this development, some commentators suggest the permit application procedure introduces unnecessary red tape, potentially delaying implementation by over two years.

General Motors made several announcements this week. Firstly, the company is re-entering the insurance market, but with a focus aligned with the capabilities of modern connected vehicles. This new service, known as OnStar Insurance, intends to utilize the extensive data collected through its OnStar connected car platform, which currently serves more than 16 million subscribers across the United States.

The U.S. automotive manufacturer also increased its investment in electric vehicles and autonomous technology by 35%. GM stated it will allocate $27 billion over the next five years to EVs and AVs. Furthermore, GM is accelerating its product launch schedule and expanding its range of planned electric vehicles. The revised strategy involves introducing 30 new electric vehicles to the global market by 2025.

Lordstown Motors announced plans to establish an automotive research and development center in Farmington Hills, with support from the Michigan Strategic Fund, as reported by the Michigan Economic Development Corporation today. This project is anticipated to generate 141 new jobs.

Luminar has finalized a supply agreement to provide lidar technology to Mobileye, a subsidiary of Intel, for its fleet of autonomous vehicles. This partnership unites an emerging leader with a long-established company in the automotive sector. An analysis of why this seemingly minor agreement merits attention is available.

Motional, the $4 billion joint venture between Aptiv and Hyundai dedicated to the commercialization of autonomous vehicles, has received permission from the state of Nevada to conduct testing of fully driverless vehicles on public roadways. The company intends to initiate driverless testing on public streets in Las Vegas in early 2021.

Officials from the National Highway Traffic and Safety Administration published an advance notice of proposed rule-making concerning automated driving. Last week, it was reported that U.S. regulators were preparing actions that would impact the autonomous vehicle industry. Specifically, it was suggested that UL 4600, a standard developed by Underwriters Laboratories offering guidance for establishing the safety case for an AV design, was a leading candidate for adoption.

The framework released this week does indeed include a dedicated section addressing UL 4600. The NHSTA Framework for Automated Driving can be viewed here.

NYT presents an in-depth examination of the competition in the car stereo market.

Panasonic has signed a preliminary agreement with Nordic energy company Equinor and engineering and industrial firm Norsk Hydro to collaborate on developing a battery business in Northern Europe. While acknowledged as a “preliminary agreement,” this development is noteworthy given the ongoing competition between LG Chem and Panasonic in the battery supply chain. As TechCrunch’s Jonathan Shieber points out, Panasonic’s expansion into Northern Europe alongside two prominent regional players in both hydrocarbons and renewable energy highlights the potential within the European market beyond the automotive industry.