With Uber and Lyft widening their services spectrum and scooter actors spread across sidewalks of major cities, the last-mile mobility actors have been locked in dreadful competition across the globe. The Asian last-mile sector has been growing with the expansion of actors such as Grab and Go-Jek. However, according to TechCrunch, not even 10% of the global venture capital volume over the past five years has been raised in the ride-hailing, food delivery and last-mile transportation categories. Companies in these three categories raised more than $22 billion in venture capital in 2017 and $18 billion in 2018.
The transportation market is capital intensive and dynamic, companies need to stay cost focused in order to keep the lead. Lyft just beat Uber to begin trading on the public markets and priced its IPO (Initial Public Offering) at $72 per share . If having the shares traded in public markets shall be the goal of the last-mile actors, there is still a lot of work to do for the unicorns in the ride-hailing, ridesharing, scooter-sharing and bike-sharing sectors to make their business profitable.
Venture capital is an important cash source to support the growth of the last-mile sector, especially when many of them are not earning money . Compared to other sectors that see a lot of venture capital, the last-mile sector’s 10% share seems fairly reasonable even with the hype of micromobility. The business is taking off but given the novelty, it’s, of course, a much riskier investment compared to other more mature business models. With venture capital investment, there are ways for small actors to secure money and to experiment with different business plans.
Written by Anne Faxér, RISE Viktoria.
2. 2019-03-28. Lyft Prices IPO Above Expectations At $72 Per Share.