Why the IPO of bike-sharing app Lime is no lemon

{"text":[[{"start":4.45,"text":"Shared electric bike and scooter companies have been patchy investments: Bird Global, Bluegogo and oBike are among those that pedalled their way straight to bankruptcy. But one survivor, Uber-backed Lime, is now heading to Wall Street through a $2bn initial public offering in the US. The difference is that Lime has gathered enough speed to keep itself upright. "}],[{"start":28.8,"text":"Lime has achieved one thing many start-ups didn’t: enough bikes to make its proposition attractive. Like ride-hailing apps or delivery services, bike sharing depends on density. Users need to know they can find a vehicle when and where they want it. Demand therefore follows supply. Last year, Lime’s fleet rose almost a fifth and revenue per bike rose 10 per cent. "}],[{"start":50.75,"text":"A tie-up with Uber helped, by putting Lime in front of millions of users, helping it gain utilisation early. It also chose its battlegrounds carefully. In London, TfL’s Santander bikes are docked and centralised, while Lime introduced the city’s first dockless e-bikes. "}],[{"start":68.95,"text":"That momentum is a valuable asset. At a mooted $2bn enterprise value, the company — which will go public under the name Neutron Holdings — would trade at 28 times last year’s operating profit, cheaper than DoorDash and Deliveroo. And it would be in line with Uber, whose operating profit is forecast to triple by 2030, according to S&P Capital IQ."}],[{"start":91.4,"text":"To match that kind of growth, Lime would need to get more users who use the service more often. In its two top-performing cities, revenue per bike is three times the company average. Raise utilisation by 15 per cent while keeping costs steady, and the company’s operating profit would rise from $70mn last year to above $200mn. "}],[{"start":113.2,"text":"Bike sharing companies grapple with wear, tear and vandalism, which shows up as higher expenses and depreciation. Lime’s first scooters in 2018 lasted a month. Today, vehicles last five years. And the bikes are ideal candidates for mobile advertising. "}],[{"start":null,"text":"

"}],[{"start":128.3,"text":"Not every city suits bikes. Markets must often be won piece by piece. In London, the borough of Richmond recently switched its e-bike provider from Lime to Forest after Lime lost a bidding process."}],[{"start":141.05,"text":"Still, Lime is gathering pace. The occasional bike will still end up stolen, smashed or submerged in a canal. But Lime has already made it further than many of its rivals. And as urban transport goes, it even has an advantage over taxis: autonomous bikes for now remain a distant prospect. "}],[{"start":167.45000000000002,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1778981007_1344.mp3"}