Scooters - The Most Unusual Success Story Of The Year

October 30, 2019 -

The next multi-billion-dollar Uber might have only 2 wheels.

Scootermania is turning micro-mobility startups into multi-billion-dollar unicorns.

This industry segment has been attracting cash and customers like no other. That’s because micro-mobility has the potential to compete with cars and ride-hailing. It is also part of the answer to ailing public transportation because it will get people there. 

That’s revolutionary talk. 

And that’s why investors are pouring money into it. 

They’ve pumped more than $5.7 billion into micro-mobility startups since 2015.

Scooter startup Bird is only two years old, but it’s already worth $2.75 billion. Just this month, it raised $275 million in fresh funding. 

In February, giant Lime raised another $310 million to push its valuation to $2.4 billion.

Berlin’s Tier, a key European rival in this sector, just raised another $60 million in new financing, led by SoftBank Group’s massive Vision Fund. 

It’s a crowded space, but that doesn’t seem to bother venture capitalists who keep throwing down cash for what they seem sure is the next revolution in urban transport. 

But right now, they’re throwing cash into chaos. And the first scooters were just … well, scooters. 

One little-known upstart is seeking to turn that chaos into order and transform the micro-mobility industry. And their potential to disrupt the multi-billion-dollar ride-share market cornered by Uber and Lyft is clear.

When you add a seat for the first time, and Bluetooth capabilities, the OjO (TSX.V:OJOOTC:AZNVF) is a scooter like no other.

Here are 5 reasons to keep a close eye on OJO as the e-scooter market hits its next phase in the multi-billion-dollar evolution: 

#1 The Best Moment in the Micro-Mobility Craze

The total mobility market is now worth $7 trillion. 

We’ve ditched ‘gigantism’, and the new global obsession is micro-mobility. It’s a craze of global proportions: 

Source: Forbes

The global micro-mobility market is expected to reach nearly $32 billion by 2029.

The urban population explosion means that more people need to be on the move in crowded spaces. That’s even more urgent when you consider that over half the world’s population is now living in urban areas. 

By 2050, it’s likely to be two-thirds of the world’s population. And it’s the first mile and last mile of getting people to mass public transportation that’s the biggest problem. 

Micro-mobility is the definitive answer. It can effectively replace many personal car and ride-hailing trips as well as deliver first- and last-mile solutions for public transit. 

That’s a revolution. 

In China alone, micro-mobility has nearly doubled accessibility to jobs, education and health care.

That’s why micro-mobility has so many venture capitalists throwing money at this segment. 

One of its biggest investor-evangelists has been Oliver Bruce, who estimates that more than 1.4 trillion miles of annual US passenger travel and more than 4 trillion miles of global passenger travel could be converted to micro-mobility modes. 

That makes this industry potentially worth hundreds of billions of dollars

#2 Any Resistance Ends Here

The early e-scooter entrants, despite all the VC cash poured into them and huge valuations, have been met with a fair amount of backlash and growing pains. 

They can’t travel far. They irritate pedestrians in crowded places. Cities hate them. They don’t feel safe, and they’re definitely not comfortable. 

This is where a seat can make a billion-dollar difference. It’s where some innovative technology and engineering can turn city officials into a business’ best friends. 

OJO (TSX.V:OJOOTC:AZNVF) has taken the giant growing pains of hyper-valued companies like Bird and Lime and turned them into the biggest potential in the segment. 

And they seem poised to beat out the biggest players in the market on safety, sustainability, distance and comfort. 

For starters, OJO scooters have seats.

That’s a great selling point when you’re also selling long-distance potential and a range that’s up to 50 miles.  

And they aren’t starting from scratch here when it comes to logistics. They’ve jumped in on existing infrastructure for high-speed mass deployment. 

OJO is already partnering with bike operators and docking stations in cities around the U.S. 

They’re working directly with city officials to turn chaos into order. 

What cities might like most when it comes to order versus chaos is this: The innovators at OJO one of the few scooter companies to have added Bluetooth speakers with audio alerts and ability to make a scooter automatically slow down in school zones or on campuses. 

It’s a winning combination from a safety perspective--so cities are definitely on board. 

So not only are we looking at the first scooter option with a seat, but we’re looking at a potential disruptor of the entire ride-hailing market--that means Uber and Lyft … 

#3 The Scooter that Could Disrupt Uber and Lyft

Uber and Lyft should be worried. 

The average Uber or Lyft ride is about 5-15 miles. 

Guess what? OJO (TSX.V:OJOOTC:AZNVF) isn’t just a scooter for short hops. It’s also doing 10-15-mile rides. 
That’s likely in part thanks to the comfort of a seat and hyper-charge power. 

That blows the average scooter out of the water, and even threatens Uber and Lyft. The average scooter ride is about 0.6 miles. OJO’s average is closer to 2 miles. And at the upper end of 10-15 miles, there are no scooters out there that can compete.

And the economics are trail-blazing. 

Right now, OJO is looking at about $15 per day, per scooter. Right now, they’ve got 200 on the road, but a big push is underway which should ramp up revenue in Q4. 

They will be increasing total deployment to 1,250 in November and by the end of the year OJO anticipates having 2,500 scooters deployed. 

That’s nearly $14 million revenue run rate. 

Next year, they’ll come out with an even newer 2020 model, and plan to have up to 15,000 on the ground. 

That’s over $80 million revenue run rate

And they’re about to go public after just completing a $6 million raise. That raise will get them through the production and deployment of 2,500 new scooters.

What will the venture capitalists like most here? The differentiated economics. As we’ve said, they’re already throwing tons of money at this segment, despite all the drawbacks. 

Bird and Lime have been criticized for moving too quickly and blowing through VC money in a heartbeat. 

OJO is methodical. It’s putting out a model that will scale, recoup and last a long time. 

#4 The Mojo Behind the OJO

It’s not sustainable to just throw a ton of scooters on the street and see what happens. 

What we’ve seen so far is an attempt to throw money at clear demand without any attention to innovation, design or urban planning details. 

OJO (TSX.V:OJOOTC:AZNVF) watched and determined where the competition was failing, badly. 

OJO is a design-first company founded by a group of wildly successful inventors, designers and consumer goods entrepreneurs. 

They include Don Ratner, OJO director, who has brought over $1 billion in famous toys and licensed goods to market for everyone from Disney and Nintendo to Coca-Cola and Mars.

OJO plans to disrupt the disruptors, and they’re disciplined enough to do it. For one, they’re ready to capitalize on the scooter blitz chaos that Bird and Lime helped create. 

The executive management includes CEO and Director Max Smith, who has successfully raised capital and driven business growth through eight major exits, including for World Color Press, LinkShare, blip, Gartner’s Tech Republic and JASH, among others.  

They’re partnering with Fiore Group, the pre-eminent merchant banking group behind market successes like Lithium X Energy and Lionsgate Entertainment, to go public this quarter, filling a gap in the equities markets with a pure-play offering of access to the massive growth of the micro-mobility sector.

They are coming in with their clean-up crew that has respect for city planning and infrastructure, a safety aspect that appeals to everyone and a plan not only for reducing congestion and carbon emissions, but for making any ride a fun ride. 

#5 Massive Upside Potential

Look no further for leadership in the micro-mobility market. Where Bird and Lime were two years ago, OJO is now. 

They’ve already launched in Austin, Dallas and completed a pilot in Hoboken, New Jersey. Ojo launched in Memphis, TN this week and are also in discussions with San Antonio, Portland, Washington, DC, Nashville, Atlanta, Seattle and more. 

Bird’s wings have been clipped a bit, and while that hasn’t stopped it from hitting a $2.75 billion valuation, there’s no upside left. 

OJO (TSX.V:OJOOTC:AZNVF) is a better beast all around, and when you have startups in this space turning into unicorns in a matter of months, the upside for a scooter company ticking all the right boxes is incredible. 

By the end of the year, their scooter deployment may be 10x current levels, and voracious venture capital may have already grabbed a big chunk of the upside. 

By 2020, if they reach their goal of 15,000 scooters across the US, that upside might be gone entirely. 

This is where Tesla meets Vespa and eats a Razor for lunch. 

In a segment that’s minting unicorns at record speed, the startup with a phenomenally more innovative product could hit unicorn status even faster. 

Other companies looking to transform the mobility industry:

Power Financial Corp (TSX:PWF) has been in the finance industry since 1984. The company operates in three segments: Lifeco, IGM and Pargesa Holding SA (Pargesa). And, with its holdings in a diversified portfolio spanning the United States and Europe, Power Financial is a leader in its field.

Focusing its investments in emerging industries, Power Financial stands to benefit by riding this wave into the future. The company’s forward-thinking attitude and liberal approach to technology is sure to leave investors satisfied. 

Kuuhubb Inc. (TSXV: KUU) is a company active in the development and acquisition of lifestyle and mobile video game applications. Its strategy is to create sustainable shareholder value through its groundbreaking AI and big data applications suggest that its stock is currently undervalued, but it’s not likely this opportunity will last for much longer.

Though it’s focus is on mobile video games, Kuuhubb’s innovative technology and focus on Big Data makes it a likely target of acquisition and could be a key player in the mobile industry.

The Descartes Systems Group Inc. (TSX:DSG) (commonly referred to as Descartes) is a Canadian multinational technology company specializing in logistics software, supply chain management software, and cloud-based services for logistics businesses. The company is making waves in the tech industry with its futuristic products and visionary leadership.

Recently, Descartes announced that it has successfully deployed its advanced capacity matching solution, Descartes MacroPoint Capacity Matching. The solution provides greater visibility and transparency within their network of carriers and brokers. This move could solidify the company as a key player in transportation logistics which is essential in the world of commerce.

Kinaxis Inc (TSX:KXS) is a provider of cloud-based subscription software for supply chain operations. The Company offers RapidResponse as a collection of cloud-based configurable applications. The Company's RapidResponse product provides supply chain planning and analytics capabilities that create the foundation for managing multiple, interconnected supply chain management processes, including demand planning, supply planning, inventory management, order fulfillment and capacity planning.

Kinaxis is a growing company, but the company has already carved out a significant piece of the pie. As a leader in its field, Kinaxis is a force which investors are keeping an eye on.

Computer Modelling Group (TSX:CMG) is a software technology company producing reservoir simulation software for critical infrastructure. Computer Modeling Group LTD. Is a tempting trade for investors as it brings together two essential industries - tech and resources- which are going anywhere any time soon. Especially as the need for security grows, a tech company involved in the oil and gas industry has an incredible opportunity to offer other services.

While Computer Modelling Group focuses on the resource industry, its technology is definitely breaking ground. Founded nearly 40 years ago by Khalid Aziz, a renowned simulation developer, the company has proven that it has staying power.  As the resource industry meets technology, this will be a stock to pay attention to.

By. Ian Jenkins


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