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E-Scooter Startup Lime Is Undergoing Layoffs to Achieve ‘Financial Independence’

January 10, 2020, 2:57 PM UTC

Profitability — or the lack thereof — strikes again. 

Lime, the popular electric scooter startup, will lay off 14% of its staff — approximately 100 people — as it pulls out of a dozen markets in the U.S. and abroad. In the United States, those markets include Atlanta, Phoenix, San Diego and San Antonio.

In a blog post, co-founder and CEO Brad Bao said, “Part of realizing our vision to transform urban mobility is achieving financial independence; that is why we have shifted our primary focus to profitability.” 

Because the scooter economy had largely been fueled by fast growth, fierce competition, and unsustainable business models, several of Lime’s rivals have had to cut jobs and shutter operations in markets too.

I’ve said it before and I’ll say it again: 2020 is the year the pendulum swings to the side of profitability and a more conservative approach to growth. In the past, venture capital firms that fund “unicorns” have had a much higher tolerance for forgoing profitability for growth, but as more and more of these unicorns trot to the public markets, the sentiment has begun to change.

As Trinity’s Patricia Nakache said at Fortune’s Most Powerful Women Summit in 2019, “We have swung way out towards growth at most costs. But now public markets have weighed in and resoundingly said, this has gone too far.”

On the bright side, it looks like startups are paying attention.

NEW FUND ALERT: J.D. Vance, the author of Hillbilly Elegy, has raised $93 million for his own Midwest-focused venture fund. Dubbed Narya Capital, the fund will be based in Cincinnati and is backed by investors including Peter Thiel, Marc Andreessen, Eric Schmidt, and Scott Dorsey Read more.

READER FEEDBACK: I got a lot of feedback from you guys on yesterday’s newsletter about Quibi. Here are a few selected responses:

“Disney had to offer D+ free for a year to 17m eligible Verizon subscribers to put up the numbers they did in the first few days (10m subs), and they had the most valuable IP in the world. I don’t think numbers will be huge for Quibi, but I’m not sure if I should be trying to compare them more to Dinsey+/Netflix, or as you pointed out in your piece, influencer-based content on IGTV and the like.” — B.G.

I agree that the whole cellphone format approach is weird but I think dropping 10 minute episodes daily could work very well. Look at how well modern soap operas do in Latin America, Europe and Asia.” — M.A.

“There’s no real problem that Quibi is trying to solve. The company is really only banking on premium content with A-list talent to break through. and I don’t want to watch that on my phone” — A.J.

“At least for me, I know that when I open up Instagram I’ll probably scroll through a few posts and then go on with whatever I’m doing. If your differentiating factor is that you have high-quality content (as opposed to memes or quick news / sports highlights), my question becomes do people really want that? I tend to believe that as much as our viewing habits have changed, when it comes to really good films or shows that we’re invested in, we still want to view it on a TV / laptop screen or at the theater where you can see more of the detail (maybe I’m just a Luddite). If you have a 2-hour movie, like you mentioned, and you need to watch it in a dozen different viewings, it seems like it would be distracting and you won’t really be able to get into it.” — B.T.

Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com 

VENTURE DEALS

- EcoVadis, a Paris-based provider of business sustainability ratings, raised $200 million in funding, from CVC Growth Partners. 

- Sisense, a New York-based business analytics platform, raised more than $100 million in funding at a valuation of more than $1 billion. Insight Partners led the round, and was joined by Access Industries and return backers Bessemer Venture Partners, Battery Ventures, and DFJ Growth.

- Aver, a Columbus, Ohio-based healthcare platform for bundled payment and value-based healthcare solutions, raised $27 million in Series C funding. Investors include Cox Enterprises, Drive Capital, Heritage Group, Hearst Ventures and NCT Ventures. 

- Just Spices, a Germany-based spice mix brand, raised €13 million ($14.4 million) in Series B funding. Five Seasons Ventures and Coefficient Capital co-led the round, and was joined by investors including Bitburger Ventures.

- Lily AI, a Mountain View, Calif.-based provider of software to help retailers optimize for customer preferences, raised $12.5M in Series A funding. Canaan led the round, and was joined by investors including NEA, Fernbrook Management and Unshackled Ventures.

- dot.LA, a Los Angeles-based news and events company dedicated to covering L.A.’s startup and tech ecosystem, raised $4 million in seed funding. Investors include 3L, Act One, Anthos, CAVU, Comcast Ventures, Crosscut, Greycroft, Hawke Media Ventures, K5, March Capital, Maveron, m13, Mucker, NFX, Pelion, Thrive Capital, Torch Capital, Troy Capital, Upfront Ventures, Watertower Ventures and Waverley Capital.

HEALTH & LIFE SCIENCES DEALS

- Virta Health, a San Francisco-based operator of an online specialty medical clinic focusing on treatment of type 2 diabetes, raised $93 million in Series C funding. Caffeinated Capital led the round, and was joined by investors including Venrock, Obvious Ventures, Creandum, Playground Global and SciFi VC.

- Cardiologs, a Paris-based company focused on artificial intelligence cardiology diagnostics, raised $15 million in Series A funding. Alven led the round, and was joined by investors including Bpifrance, ISAI, Kurma Diagnostics, Idinvest Partners and Paris Saclay Seed Fund.

- Jasper Therapeutics, Inc., a Menlo Park, Calif.-based biotechnology company focused on  hematopoietic cell transplant therapies, raised $14.1 million in funding. Roche Venture Fund led the round.

PRIVATE EQUITY DEALS

- Columbia Capital, Greenspring Associates and DHL acquired Riskpulse, an Austin, Texas-based company that offers online weather information, and combined it with Resilience360. The firms invested a combined $22.7 million in the new, independently-operated entity.

- Industrial Opportunity Partners acquired Midwest Recycled and Coated Containerboard Mill, a Combined Locks, Wisc.-based manufacturer and distributor of various grades of paper, including high-quality recycled containerboard. Financial terms weren't disclosed. 

- Texas Next Capital made an investment in Capital Precast, a San Marcos, Texas-based manufacturer of precast concrete underground utility products. Financial terms weren't disclosed. 

- Thermal Solutions Manufacturing, a portfolio company of Altus Capital Partners III, acquired Alfa Laval Champ (to be rebranded TSM Champ), a specialty provider of tubular heat exchangers to the marine and industrial markets. Financial terms weren't disclosed. 

- Marlin Equity Partners acquired Blue Mesa, a New York-based provider of a mobile-first diabetes prevention program technology platform. Financial terms weren't disclosed. 

OTHERS

- Dun & Bradstreet acquired Orb Intelligence, a Palo Alto, Calif.-based digital business identity and firmographic data provider. Financial terms weren't disclosed., 

IPOs

- Orange, France’s largest telecom developer, is weighing an IPO of its Middle East and Africa operations. Read more.

- 58 Home, a Chinese online services firm, plans to list in the U.S. at a valuation of about $2 billion, Bloomberg reports citing sources. Read more.

FIRMS + FUNDS

- Aberdeen Standard Investments, a U.K.-based asset management, raised $425 million for its eighth U.S. private equity fund, Aberdeen U.S. Private Equity VIII.

PEOPLE

- Prosek Partners promoted Mike Geller to partner.

- Omnivore promoted Subhadeep Sanyal and Reihem Roy to partner. 

- Flare Capital Partners promoted Parth Desai to principal.

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