Before the COVID-19 pandemic, investments in the shared-micromobility industry soared in line with growing ridership and utilization. From 2015 to 2019, almost $7 billion was invested in this market. Funding contracted sharply in 2020, to around $800 million, but the industry is now resuming its growth trajectory, as we projected in a previous article, and capital flows are also rising. In 2021, micromobility players attracted approximately $2.9 billion in new investment, and they may exceed this level in 2022. But the capital flows are now coming from different types of investors, and they are going to regions and vehicle types different from those of the past.
To gain more insight into these differences, we used McKinsey’s Micromobility Investment Database, which applies big data algorithms to track publicly disclosed investments in companies that either provide shared-micromobility services or produce vehicles and supporting technology for the shared-micromobility industry.1 The tool can analyze investments by investor and by vehicle type—for instance, e-kickscooters, electric bicycles, and electric mopeds—as well as geographic areas. It focuses on investment in companies in the core micromobility markets of Asia, Europe, and North America.
A regional shift to Europe
Since 2018, about $8.4 billion has been invested in micromobility companies in the three core markets—split relatively equally among Asia ($3.1 billion, or 37 percent), North America ($2.9 billion, 34 percent), and Europe ($2.4 billion, 29 percent) (Exhibit 1).
To determine if funding patterns changed over time, we segmented total investment by looking at two time periods: the years before the pandemic (2018 to 2019) and the next three years (2020 to 2022). Our analysis shows that the flow of funds has not been evenly split in recent years and that Europe has taken the lead from Asia. Investments in micromobility companies headquartered in Europe represented only 12 percent of global flows before the pandemic but almost 50 percent from 2020 to 2022. Investments in North American companies also increased during the second time period. Asia had the most significant funding drop over time: from $2.7 billion (60 percent of the total) to just $400 million (10 percent).
One reason for this shift may be the accelerated measures (such as building dedicated urban bicycle and scooter lanes) that European policy makers have used to make micromobility safer and more attractive. In addition, many European players have grown extremely rapidly in recent years and are acquiring smaller competitors, thus fueling continued investment.
E-kickscooters remain the most prevalent vehicle type
Around the world, companies that focused on shared e-kickscooters attracted the most investment—$5.2 billion—from 2018 through 2022, followed by bicycles at $3 billion and mopeds at $200 million (both including electric offerings). Since the pandemic began, the share of investment going to e-kickscooters has increased and now stands at nearly 90 percent. That concentrated flow probably results from continued consolidation among e-kickscooter providers as market leaders acquire smaller players (Exhibit 2).
Splitting investments by region and vehicle type shows that e-kickscooters attracted 98 percent of total funding in North America and 86 percent in Europe from 2018 to 2022. By contrast, in Asia bicycles attracted the most investment—more than 80 percent of the total.
Another insight emerged through a deep dive on investments in companies that focus on providing supporting services for shared micromobility rather than offering the shared services by themselves. The analysis focused on start-ups that provide services related to parking, charging, fleet management, maintenance, and relocation. Before the pandemic, investors had provided around $100 million in funding to such companies in China, Europe, and North America. This number more than tripled between 2020 and 2022, when it reached almost $350 million. A large portion of this increase relates to parking and charging solutions, which accounted for almost half of total investment, compared with only about 10 percent prepandemic. This strong growth may have occurred because it has become increasingly obvious that an efficient parking and charging infrastructure can reduce both operational costs and idle time for vehicles. Such benefits are particularly important for free-floating, shared micromobility fleets.
Institutional investors continue to dominate the market
Investors fall into three main types:
- institutional investors, including banks, venture capitalists, and private-equity firms
- OEMs (including those for micromobility) and suppliers
- mobility service providers
From 2018 through 2022, institutional investors have provided around $7.7 billion in micromobility funding—92 percent of the total $8.4 billion received. Mobility service providers accounted for about $500 million in funding, or 6 percent, and OEMs for about $170 million, or 2 percent (Exhibit 3).
In the pandemic’s wake, institutional investors still represent the largest share of capital, but the gap has narrowed and the amount they invest has declined in absolute terms: they accounted for about $4.2 billion in funding from 2018 to 2019 but for only $3.4 billion from 2020 to 2022. For the same time periods, the amount mobility players invested nearly tripled, to $390 million, from $140 million.
Several trends help explain the investment shift. Before the pandemic, many venture capital firms invested in immature micromobility players, most likely because they saw the potential of this nascent market. More recently, larger shared-mobility players have been increasing their efforts to access the micromobility segment via mergers and acquisitions, thus raising their share of investment. In addition, existing micromobility players are investing more funds in their businesses as they expand into new cities or double down on new vehicle platforms or customer segments in the cities where they currently operate.
Institutional investors still preferred electric-bicycle ventures in 2018, directing about 72 percent of their funding to this segment. Their preferences began to change in 2019, however, when the buzz around e-kickscooters started to accelerate. The share of institutional investment going to this segment rose from about 60 percent in 2019 to nearly 90 percent in 2021. Electric mopeds have attracted only minor interest from institutional investors across the years.
McKinsey data show that micromobility investment patterns have changed since the pandemic, with more funding now flowing to Europe and e-kickscooters. Institutional investors still provide the most funding, but their share has decreased. The micromobility segment will continue to evolve quickly, and we will continue to monitor developments. Stay tuned.
1. The database aggregates information from Crunchbase, Pitchbook, company websites, and major media outlets.
Kersten Heineke is a partner in McKinsey’s Frankfurt office, where Benedikt Kloss is an associate partner; Darius Scurtu is a solution associate in the Munich office; and Timo Möller is a partner in the Cologne office.