Why Lime says the time is almost right to go public

Lime, the startup with shared e-scooters and e-bikes in 280 cities around the world, has been talking about going public for years. Now, Lime CEO Wayne Ting says the economic stars are finally aligning to actually make it happen.

The public markets have been in the doldrums for nearly two years amid higher inflation, rising interest rates and geopolitical tensions. A recent rally in the market has encouraged demand for new listings, and a slew of initial public offerings are expected in the coming months. This, along with Lime’s self-reported growth and profitability, is giving the company confidence to consider its own public debut.

“If the market reacts well, and as more companies come out [with IPOs], we have the economics, the growth, the profitability to take Lime public hopefully as soon as the market permits,” Ting told TechCrunch.

On Tuesday, Lime once again claimed to be an island of profitability in an industry that is otherwise failing to make the unit economics work. 

Without sharing any other financial metrics that would provide a window into the company’s overall health, Lime said it reached adjusted EBITDA profitability of $27 million for the first half of 2023. On an unadjusted basis, that number is more like $20.6 million. 

Lime didn’t report revenue. The company did disclose that it brought in $250 million in gross bookings, which is a 45% increase from the same period in 2022. Gross bookings represent the total value of customer bookings before expenses. While they don’t tell us the income Lime generated after deducting direct costs associated with providing scooter and bike rides, gross bookings do demonstrate a healthy demand for Lime’s services. 

Lime also wouldn’t share its operating costs, but the company reported a margin improvement of 29% from H1 2022. 

“Our latest generation of scooters and bikes are lasting longer than ever, so our maintenance capital expenditure has come down,” said Ting. “We’re also investing a lot in growth. There’s more demand this year than ever before for the whole industry.”

Meeting increased demand with more scooters

Lime appears to be growing at an impressive clip. The company last shared its fragmented financials with us in February, reporting adjusted EBITDA of $15 million and unadjusted EBITDA of $4 million for the full year of 2022. That means Lime made more in the first half of 2023 than it did in all of last year. 

Aside from improved margins, Lime attributes its increase in profitability to 20% more vehicles on the ground and a 16% bump in trips per vehicle per day — up from what, though, Lime wouldn’t share. The company did say it recorded over 40 million trips taken globally in the second quarter alone. 

Lime certainly has a reputation for making it work when other companies have struggled, at least if we look at Lime’s 90% win rate in cities. 

“From a growth perspective, the biggest thing is you have to win RFPs. We can only operate if city governments give us permits to operate,” said Ting, noting that Lime’s broad operational experience helps it win over cities. 

Lime’s technology is also one of its killer apps, according to Ting. Most shared e-scooter and e-bike companies outsource the production of vehicles to Chinese companies Okai or Segway-Ninebot, and therefore come to the table with a lot of the same tech. Lime has built its hardware from the ground up for years, and claims to build vehicles that are safer, longer-lasting and more sustainable. 

“Riders care about this, too. When we launch our new generation of scooters and e-bikes, we actually see our utilization – our trips per vehicle per day – go up….it shows riders are choosing us,” said Ting. 

Not every scooter company can say the same. 

Lime vs Bird

Bird, Lime’s biggest competitor in the United States and one of two shared micromobility companies to go public, has seen rider utilization decrease over the years, and has shrunk its geographic footprint in an effort to reach profitability. 

In October 2022, Bird exited several dozen U.S. and EMEA markets, as well as Sweden, Norway and Germany. That downsizing came after Bird laid off a quarter of its staff and received a warning from the NYSE for trading too low. Earlier this year, Bird attempted a reverse stock split to bring its stock price back into compliance, but the company is still trading below $1. 

Bird’s unimpressive financials have given the whole industry a bad name, causing many to wonder if shared micromobility is a viable business model. Unlike Lime, the company has yet to achieve profitability by any metric. Despite massive cost-cutting measures, Bird is still operating at a net loss of $53.6 million, as of the six months ending June 30, 2023. 

In the first half of the year, Bird’s unadjusted EBITDA was -$16.6 million. That’s after pulling in revenue of $78 million and recording a gross margin improvement of 31%. Bird closed the second quarter free cash flow negative -$26.9 million. 

Bird recorded 14 million rides taken on its scooters in H1, with rides per vehicle per day hitting just 1x, which is down 19% from the same period last year. 

Lime didn’t share how many rides per vehicle per day it gets, but Ting said it was “significantly above 1x” globally. 

Lime’s self-reported success is nothing new – the company has been touting its own intermittent profitability for years now. In 2020, Lime said it was both operating cash flow positive and free cash flow positive in the third quarter, and was on pace to be full-year EBITDA profitable in 2021. Lime also reported a profitable third quarter in 2021 as it was able to turn COVID from “a headwind into a tailwind.”

Reviving Lime’s IPO goals

Lime has been teasing plans to go public for years. In November 2021, Lime raised a $523 million convertible note round, a first step towards an IPO. Unfavorable market conditions slowed Lime’s roll, pausing its public debut. Now that companies like Arm, Kava and Instacart are looking to join the public markets, Lime is once again testing the waters. 

“We’re seeing the opening of the IPO market, and it’s happening at a great time because if you look at 2021, a lot of the companies that went public then are not growing particularly fast or were not profitable,” said Ting. “Today, I think the market is going to demand significant growth, and it’s going to demand proven profitability, free cash flow generated. And the great thing is Lime is exactly there. We’re delivering really fantastic growth so far this year. We’re on a path to getting free cash flow positive. We have all the ingredients to take this company public.”

Lime did not confirm if it has hired an investment firm as underwriters for its IPO yet, but the message is clear. If the market mood remains positive, Lime will make its move.