Capital Floods In – Record Venture Investment in Micromobility

While e-bike sales were breaking records, another story was unfolding in the world of venture capital. European micromobility startups pulled in unprecedented levels of investment in 2021, with the region leading the world in deal count and attracting over $778 million-easily surpassing 2020's total by nearly 45% .

Europe Takes the Lead

With just over two months remaining in 2021, Europe had already secured over a third of global micromobility transactions, according to PitchBook data. The region's startups raised a record $778.2 million, with deal count on track to reach new heights.

This stood in stark contrast to the United States, where funding levels for micromobility startups fell to their lowest since 2014, with just $335.1 million invested across 18 deals-a far cry from 2018, which saw over $3 billion invested.

Source: PitchBook 

Tier Mobility: Europe's First Micromobility Unicorn

The headline transaction of 2021 came from German e-scooter startup Tier Mobility, which raised $200 million for the first close of its Series D round. The round was led by SoftBank's Vision Fund 2 and Mubadala Capital, with participation from Northzone, Speedinvest, and RTP Global.

The funding valued Tier at $2 billion, making it Europe's most valuable VC-backed startup in the micromobility space and tying with US rival Lime for the global No. 3 spot.

"This round validates our approach to building a sustainable, profitable micromobility business," said Tier leadership at the time. The company had weathered the COVID-19 storm better than many competitors, focusing on operational efficiency and strategic market selection.

Voi and VanMoof Follow Suit

Tier was not alone in attracting major investment. Swedish operator Voi raised $205 million in a Series C round in August 2021, demonstrating continued investor confidence in the shared scooter model despite pandemic-related ridership fluctuations.

Even more notable was the $128 million round raised by Dutch e-bike brand VanMoof a month later. This represented one of the largest-ever investments in a European e-bike brand and signaled that private e-bike ownership was attracting the same level of investor interest as shared mobility services.

Why Europe Won in 2021

According to Mathias Ockenfels, general partner at Speedinvest (an early investor in Tier), Europe was a better fit for micromobility products than the United States for several reasons :

• Better infrastructure: European cities, particularly in the Nordics and Benelux countries, had existing cycling infrastructure that made scooter and bike sharing viable from day one.
• Sustainable approach: European startups were more focused on building sustainable, capital-efficient businesses rather than chasing rapid growth at any cost. "I think European micromobility startups are more focused on being sustainable and, because they weren't swarmed with money, are more capital-efficient," Ockenfels explained .
• Long-term orientation: While US startups had seen high valuations in 2018 only to hit ceilings, European operators took a more measured approach to expansion.

COVID-19 as Catalyst

The pandemic, which initially devastated shared mobility ridership, ultimately became a catalyst for adoption. As governments encouraged people to find alternative solutions for urban travel, new players like Tier proposed "smart, sustainable solutions for urban environments," according to Northzone general partner Michiel Kotting .

"These advances in transportation would have taken years, perhaps decades, more to gain the kind of traction instigated by COVID-19," Kotting observed .

The UK provided a concrete example of this acceleration. The British government opened up trials for e-scooters across London, marking a significant shift in regulatory stance and creating new market opportunities for operators .

Market Consolidation on the Horizon

Even as capital flooded in, analysts predicted that 2021 would mark the beginning of significant market consolidation. Tier, Voi, and Bolt had emerged as the standout operators that not only weathered the COVID-19 financial storm but were able to attract massive equity capital investment, scale operations, and aggressively hire across all business units .

Lime remained the one US-based operator able to sustain its European offer, albeit with investment from Uber and the caveat that 66% of its growth occurred outside its home US market .

Smaller and mid-level operators faced a cash crunch due to:

Lack of consumer brand recognition

Limited geographic coverage

Insufficient scale to succeed in transit-rich, multi-modal European cities

Analysts expected increased mergers and acquisitions among these smaller players or their complete divestment from the European market in the coming months .

Investment Implications for Manufacturers

For hardware manufacturers like KUKIRIN, the surge in VC investment had several implications. Well-funded operators were expanding their fleets, creating demand for vehicles. At the same time, these operators were becoming more selective about suppliers, prioritizing quality, durability, and total cost of ownership over upfront price.

The rise of VanMoof's $128 million round also signaled that premium consumer brands could attract significant investment, suggesting that the market for high-quality private e-bikes and scooters was far from saturated.

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