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As major scooter companies struggle, upstarts seek inroads



Lockdowns have forced scooterers off the streets and pushed the likes of Bird and Uber to downsize or consolidate as revenues hit rock bottom.

But heartened by early signs from Asia show that bike sharing and scooter sharing may be the first of transportation companies to come back as consumers eschew tightly packed subways and buses, investors are forging on.

Now upstarts are trying to make inroads, seeing opportunities to grow as their larger competitors grapple with the coronavirus. On Thursday, Superpedestrian, a Boston-based maker of electric scooters, raised $15 million in funding led by Edison Partners as it plans to expand its fleet into four new cities in the next few weeks in the U.S. and Europe. In turn, Superpedestrian acquired Zagster, a fleet management firm, from Edison Partners.

“The Covid-19 dynamic cleared and leveled the playing field a little bit,” said Edison partner Daniel Herscovici to Term Sheet.

While the coronavirus has razed demand, Superpedestrian plans to continue to deploy, as it has only made a commercial push in one market, Fort Pierce, Fla.—an advantage as its larger peers are preoccupied with downsizing their heftier fleets.

The company builds its own scooters that it says can detect failures and quickly stop if a rider is attempting to enter a restricted city zone—making the scooters themselves cheaper and more friendly to city officials, says CEO Assaf Biderman. And with the acquisition of Zagster, the company also will have a charging crew of employees rather than gig-economy workers like Bird and Lime—giving it more control over its fleet.

Existing investors Spark Capital and General Catalyst also participated in the round.

Private markets get public: After a multi-year effort from the world of alternative assets, the U.S. Department of Labor said private equity could be included in defined contribution plans like 401(k) retirement savings plans and IRAs—a move that Evercore analysts say could unlock as much as $400 billion in capital. But whether those that manage those funds decide to add private equity to their offerings, given the asset class’ illiquidity and complex fee structure, is another question.

Finally, some PPP clarity: On Wednesday, the Senate passed a Paycheck Protection Program reform bill that received approval from the House last week. The new rules, now awaiting President Donald Trump’s signature, would allow small businesses to use 60% of the loan money on payroll instead of the previous 75%, and allow companies to spend the funds for six months versus two months, among other changes. The new bill comes as demand for PPP funding has dried up in part because of the uncertainty around the program and the coronavirus. While the first tranche of the PPP ran out in 14 days, much of the second still remains unspent, with some $150 billion still on the table. Read more.

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