A Venture Capitalist Explains Why Investing In Scooter Startup Bird Was a Good Decision

Electric scooter startup Bird officially raised a total of $300 million in venture funding at a reported $2 billion valuation. Sequoia led the round, and was joined by investors including Accel, B Capital, CRV, Sound Ventures, Greycroft, and e.ventures.

At this point, you’re likely tired of my commentary on this topic, so I spoke with an investor who participated in Bird’s latest round about the massive fundraise and the challenges that lie ahead.

Below is Term Sheet’s conversation with B Capital partner Raj Ganguly, who co-founded the venture firm with Eduardo Saverin. The comments have been lightly edited for length and clarity.

On getting comfortable with the valuation: “Bird’s ability to scale revenue with no paid customer acquisition has been incredible. It is one of the fastest growing consumer companies, which is incredible considering it is a physical product, and not software which you can scale with much lower marginal cost. Ultimately, Bird has the potential to completely change how we think about short-distance mobility.”

On why Bird needs so much capital: “Bird will require capital to increase penetration in existing cities and launch into new geographies — and capital is part of that. The capital will generally be used for domestic and international expansion.”

On international expansion: “One of B Capital’s largest offices is in Singapore, which is the hub for Southeast Asia, China, and India. We’ve already seen lots of transportation innovation in the region with great companies like Grab, Didi, and Gojek, and we fundamentally believe that Bird has an opportunity for growth in this region as well.”

On navigating regulation as it expands into new markets: “Bird’s approach to working with cities is fundamentally collaborative. It shares its traffic data with cities and tries to inform them of the benefits of electric scooters: a reduction in cars on the road. Bird has to be of benefit to consumers and the public while also working with public officials and regulators. We’re confident in [Bird CEO and ex-Uber exec] Travis VanderZanden and the team here — they’ve witnessed this play out first hand in the automotive ride-sharing space and learned a lot of lessons about how to work with regulators.”

On the company’s biggest challenges: “Like with any marketplace, Bird needs to be hyper-focused on meeting the demand with the appropriate supply in every city, at every moment in time. This means building a world-class supply chain and the logistics required to quickly deploy scooters in both existing markets and new markets where their presence on the ground may be light.”

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