Shared electric micromobility giant Lime closed a $ 523 million increase in convertible and term loans, money that Lime CEO Wayne Ting says is the next step on the company’s path to going public next year. Lime will use the capital to invest in its decarbonization efforts, refreshing a significant portion of its fleet with its Gen4 e-bikes and e-scooters, scale in more cities and develop new technologies that will help win more RFPs in the city.
“This has been a round with a lot of requests and I think it really underlines the renewed interest in micromobility as an industry and, more importantly, the recognition that Lime is the undisputed leader in this space,” said Ting. TechCrunch. “Companies typically make a convertible note as a last round before going to IPO and investors are betting that the company is going public and want to get into the round soon because they come at a discount. And we certainly think the fact that you know, as well. $ 400 million in investment coming up is a real big milestone as we look to make Lime public next year. “
Of the total loan amount, $ 418 million is made up of convertible debt led by Abu Dhabi Growth Fund, Fidelity Management & Research Company, Above and some funds managed by Highbridge Capital Management. That debt will automatically convert into shares when Lime goes public. The remaining $ 105 million comes as a senior secured term loan from the UBS O’Connor private credit group. Lime did not disclose the terms of the loan.
Fidelity and Uber are among Lime’s biggest previous investors. In 2019, Fidelity was a major investor in Lime’s $ 310 million Series D, and last year, Who led a $ 170 million downward round for Lime as it struggled with pandemic woes, a deal that saw Lime acquire Uber Jump’s micromobility subsidiary.
This announcement, along with Lime’s stated intention to go public next year, comes as the competitor Bird enters the markets through a SPAC agreement with Switchback II Corporation. Ting did not specify when next year Lime will ask for an IPO or whether it will go the traditional route or attempt a SPAC merger, but sources familiar with Lime say the company is unlikely to pursue the SPAC route.
“Our goal is to make sure we have enough capital to achieve our mission, which is to build a shared, affordable, green transport alternative,” said Ting.
Earlier this week, Lime had its carbon goals validated by the Science-Based Targets Initiative, an organization that promotes best practices in emissions reductions in line with climate science and announced that it is working to be consistent with the Paris Climate Agreement and be net-zero by 2030. The company is dedicating $ 20 million of its latest round to decarbonization efforts, such as investing in cleaner hardware and ensuring that 80% of its supply chain sets better emissions targets. Capital goods, which includes the vehicles themselves, including all material mining and manufacturing containing them, account for 44.3 percent of Lime’s total emissions, according to the company’s carbon goals report. Pre-purchased goods and services, consisting of scooter parts and warehouse costs, account for 25.8%.
“I want to show tangible results through capital investments to change our operations, to push our suppliers,” said Ting, who also said that Lime will not continue to work with suppliers who do not have their own carbon goals in the hopes that others will In addition, they pressure manufacturing partners to make similar commitments. “We mean business when we talk about decarbonisation and transportation. When we become a public company, I want our investors to know that this is what this company stands for.”
Lime will primarily use the funds to double its existing municipal permits, deepening its relationships in the markets where it already resides. It might look like a building new vehicle modalities or investing in technology “that actually makes us good partners for cities as we expand and expand our business,” Ting said, but he didn’t specify what new modalities or technologies Lime is exploring.
However, last month Ting said Lime is interested in joining the sidewalk sensing technology club during a tech event of the WSJ, at that time the CEO also stated that Lime is profitable for third quarter EBITDA for the second time. Lime was able to reach this level largely through profit growth, which means the company is running a tight ship. But COVID continued to impact new user and mainline growth, despite the fact that the operator launched 80 contracts this year.
The main use cases for Lime, commuting and tourism are slowly starting to return. The United States just announced it would be lift the travel ban for Europeans who have been doubly vaccinated. Expansion into new cities is also on Lime’s pre-IPO roadmap. Ting said Lime is aiming for North American and European expansion, but is also interested in looking to the Middle East, where the company’s main investor is based in this round.
“We have actually seen our intercity travel increased by a ton and in 2021 our revenues will return to pre-pandemic levels of 2019,” said Ting. “People are looking for a safe, affordable and one-passenger way to get around, and many people have moved their users to micromobility platforms like Lime. When I look forward to 2022, we have the opportunity to deepen that relationship with motorcyclists. “.