- Autotech Ventures isn’t letting its $200 million transportation-specific portfolio anywhere near scooter companies.
- Alexei Andreev, founder and managing director of the firm, said that his reticence is a three-fold problem that stems well beyond the basic business models.
- With billions of dollars pouring into micromobility startups by firm’s as large as Softbank, Autotech is sitting this one out for now.
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Autotech Ventures, a San Francisco-based firm with a portfolio valued at nearly $200 million, has made investments in almost every segment of the red-hot transportation space.
The fund invested in Lyft three years before its initial public offering this year, and has other bets in everything from electric vehicle charging networks, self-driving car sensors, and apps that help drivers find parking.
Still, there’s a buzzy section of the venture capital word that investors have poured billions of dollars into that Autotech won’t touch: scooters.
“We were very interested in the space, and looked the entire ecosystem,” Alexei Andreev, Autotech’s founder and managing director said in a recent interview. “But we found it challenging to pick a winner.”
The problems with picking a player to back were three-fold. First, there’s little differentiation among the current leaders, like Bird, Lime, Uber, Lyft and more.
“Until recently, most of [the scooters] are made by the same manufacturers in China,” Andreev said. “All you see is just slightly different branding.”
The second problem is that there aren’t really any barriers to entry to the industry. That’s partly why so many startups, easily numbering into the dozens, have sized the opportunity to ride the scooter wave as people around the world flock to the rental services.
“Whoever can raise more money can flood cities with scooters,” Andreev said. “Imagine someone else raises even more money and he or she can compete successfully with existing players. We saw it as a game where the biggest check wins.”
Specifically, with SoftBank’s $100 billion “vision fund” reportedly circling for a potential investment, Andreev says Autotech was reluctant to get in the game against such a large player.
Lastly, there’s the regulatory question.
Just as Uber and Lyft sent some cities scrambling to develop ways to control, regulate, and monitor ride-hailing on their streets, so to have scooter companies upset some local governments who wanted a larger hand in setting rules for their vehicles.
“Another uncertainty factor is cities that are regulating the number of players in a given area,” Andreev said. “And to our surprise, Lime and Bird are not winning every city, sometimes it’s a very unusual combination of players. Do we really want to bet on a particular company knowing that political decision making is a big part of your eventual success?”
Spin, as one example, knows that’s a big part of the continued success for scooter companies. In an interview with Business Insider in March, CEO Euwyn Poon explained that, despite trailing the pack in terms of capital raised, the Ford-owned scooter service instead sought to kindle strategic relationships with local governments.