Europe leads the pack for 2021’s micromobility VC deals

Investments in European micromobility startups are going through the roof as their US counterparts struggle to rebuild momentum after a banner year in 2018.

With just over two months left to go in 2021, Europe is leading the world for micromobility deals with over a third of global transactions in 2021, according to PitchBook data. Startups in the region have pulled in a record $778.2 million, easily surpassing last year’s total by nearly 45%. Deal count is also on track to reach new heights, currently falling short of 2020 by only two transactions.

The latest data point comes courtesy of e-scooter startup Tier Mobility, which has raised $200 million for the first close of its Series D. The round was led by SoftBank’s Vision Fund 2 and Mubadala Capital, with participation from investors including Northzone, Speedinvest and RTP Global. Now valued at $2 billion, Tier is Europe’s most valuable VC-backed startup in the space and shares the global No. 3 spot with US rival Lime.

“As governments encourage people to find alternative solutions to travel around cities, new players like Tier have proposed smart, sustainable solutions for urban environments,” Northzone general partner Michiel Kotting said. “These advances in transportation would have taken years, perhaps decades, more to gain the kind of traction instigated by COVID-19.”

While the pandemic initially led to reduced ridership, it has become the catalyst for some countries to promote adoption—like the UK, which has opened up trials across London for e-scooters. The accelerated adoption of micromobility has led to sizable deals that, along with Tier’s Series D, include e-scooter startup Voi’s $205 million Series C in August and e-bike brand VanMoof’s $128 million round a month later. 

While investor confidence remains strong in Europe, across the Atlantic, funding levels for US startups in the industry have fallen to their lowest since 2014, with $335.1 million invested across 18 deals—a far cry from 2018, which saw over $3 billion invested. Elsewhere, Asia remains the global leader for capital invested in 2021 with its $1.3 billion accounting for 49% of the total.

According to Speedinvest general partner Mathias Ockenfels, Europe is a better fit for micromobility products than the US, as the region has better infrastructure for bikes and scooters, particularly in areas like the Nordics. He also believes that a larger focus on long-term growth has led to Europe winning out. 

“There was a lot of hype in the US at the beginning where a lot of players were very quickly seeing high valuations but have now hit a ceiling,” Ockenfels said. “I think European micromobility startups are more focused on being sustainable and, because they weren’t swarmed with money, are more capital-efficient.”