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former Uber (and Lyft) exec raises $15 million for his controversial e-scooter startup: Bird

An electric-scooter rental startup led by a former Uber and Lyft executive that has sparked a legal battle in Santa Monica, California, has landed $15 million in funding to expand across the US.

Bird is a startup that lets customers rent dockless electric scooters (or “Birds”) with the tap of an app and then leave them on the street when they’re done. It first launched in Santa Monica, the ocean-facing city near Los Angeles, in September — sparking disruption, hundreds of traffic stops, and a criminal complaint against the startup and its founder.

The startup has since expanded to other neighborhoods in Los Angeles County and San Diego, and on Tuesday it announced it had raised $15 million in venture-capital funding led by Craft Ventures to support its expansion throughout the US.

The company says it has 50,000 active users and has seen 250,000 rides on its platform. (It isn’t disclosing its valuation or revenue.) The startup aims to have a presence in 50 US markets by the end of 2018, its founder and CEO, Travis VanderZanden, told Business Insider.

But Bird’s rollout thus far hasn’t been entirely smooth.

“These scooters literally just began showing up on our streets last fall,” Santa Monica’s director of policy, Anuj Gupta, told the paper. “The challenge is that they decided to launch first and figure it out later.”

Legal issues and other complications, as it turns out. For example, according to that same Post story, local police officers issued 97 citations involving Bird scooters in the first six weeks of this year; the city’s fire department has responded to eight related accidents, some including minors and adults; and according to a senior marketing and communications manager for downtown Santa Monica, there have been numerous complaints of the scooters being left in front of doorways, in the middle of driveways and on wheelchair ramps.

Asked if he thought Bird made mistakes with its launch, VanderZanden answered carefully: “Our approach is to work with cities very early on in the process, so we reached out, started a dialogue with Santa Monica the week we actually launched … Any time there’s new innovation it’s never clear exactly where you fit into the permitting and regulatory scheme.”

He added: “I’m happy to say in the last month we’ve made a ton of progress working with the city of Santa Monica … Santa Monica is an environmentally friendly city. I think ultimately we all agree Bird is a good thing for the city.”

For starters, they are cheap to use, he notes. In addition to a driver’s license, new customers need only plug a credit card number into the app. After that, it’s $1 per ride, plus 15 cents per minute, and riders can go as far as the scooter’s electric charge will take them at a top speed of 15 miles per hour. VanderZanden says some have made it to LAX. Others have ridden from Santa Monica into downtown L.A.

VanderZanden says that Bird is willing to share some of the data it’s collecting with cities. “We really want to work with cities and go in early with figure out how Bird best fits in. We realize we’re just one part of the transportation puzzle.”

VanderZanden, who says Bird ships riders free helmets when they request one from the app, also says it does its best to educate riders, including on where to park Birds (near bike racks, ideally), where to ride them (bike lanes), and via stickers that it plasters on the floorboards of the scooters that list safety regulations.

He stresses, too, that Bird employees begin collecting the scooters at 8 p.m. every night, clearing all of them off the street and only returning them to the fronts of coffee shops and other local businesses — at their own request, he says — by 6 a.m. the next day.

As for what happens if someone is injured, we gather that Bird pays if one of its scooters breaks but not if a rider is being reckless. VanderZanden declines to get into specifics, offering instead that, “Every mode of transportation is dangerous . . . but you can’t protect against people not obeying traffic laws.”

At any rate, investors don’t mind at all that Bird is still figuring things out. It just closed on $15 million in Series A funding, including from Tusk Ventures, Valor, Lead Edge Capital, and Goldcrest Capital.

Bird employees have since met with Santa Monica’s director of transportation and mobility and had “a series of really productive conversations,” says VanderZanden, noting that with “any new innovation, you have to work with the city to figure out how you best fit into the regulatory model.”

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