It is easy for newspapers and other news outlets to fascinate tech-savvy readers with success stories of start-ups and skyrocketing valuations. Famous examples are Uber and Spotify: Uber targets a valuation of about §120bn in its floatation in 2019 (Davies and Neate, 2018) and Spotify went public in April 2018 and was valued at about $27bn (Nicolaou and Bullock, 2018). These companies stand for extremely fast growth and the disruption of their respective industries within an extremely short time period. To reach the highly sought-after unicorn status (a valuation of more than $1bn) it took the ride hailing start-up (Uber) only four years and six months and the music streaming startup (Spotify) five years and three months (Fleximize.com, 2018). However, the start-up Bird (bird.co) dwarfed the aforementioned growth rates in 2018 when it was valued with more than $1bn after only about eight months of operations (Griswold, 2018).
So how was Bird able to become so valuable in such a short term? What new technological invention was made? Turns out that Bird’s business model is not based on any new invention, but on a skillful orchestration of existing technologies at the right timing. Bird provides last mile mobility by renting dock-less e-scooters in major US cities. The renting process takes place through a user-friendly smartphone application and costs around $2.5 for a 10 min renting period. Taking funding rounds of the leading venture capitalists in the world as an indicator Bird will be able to change the way how people will move around in cities on a global scale.
How do you feel about such high valuations? Do you believe such growth expectations can be achieved? Is it necessary to scale/ fundraise at such a pace?
Davies, R. and Neate, R. (2018). Uber targets $120bn valuation for 2019 flotation. [online] theguardian.com. Available at: https://www.theguardian.com/technology/2018/oct/16/uber-targets-120bn-valuation-2019-flotation-report [Accessed 19 Oct. 2018].
Fleximize.com. (2018). The Speed of a Unicorn. [online] Available at: https://fleximize.com/unicorns/ [Accessed 19 Oct. 2018].
Griswold, A. (2018). Bird is the fastest startup ever to reach a $1 billion valuation. [online] qz.com. Available at: https://qz.com/1305719/electric-scooter-company-bird-is-the-fastest-startup-ever-to-become-a-unicorn/ [Accessed 19 Oct. 2018].
Nicolaou, A. and Bullock, N. (2018). Spotify ends first trading day at $26.5bn valuation | Financial Times. [online] ft.com. Available at: https://www.ft.com/content/3cfb00fc-3745-11e8-8b98-2f31af407cc8 [Accessed 18 Oct. 2018].
Wilhelm, A. (2018). Why The Heck Is Bird Potentially Worth $1B?. [online] news.crunchbase.com. Available at: https://news.crunchbase.com/news/why-the-heck-is-bird-potentially-worth-1b/ [Accessed 17 Oct. 2018].
