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Lime touts a 2020 turnaround and 2021 profitability

Micromobility company Lime says it has moved beyond the financial hardship caused by the COVID-19 pandemic, reaching a milestone that seemed unthinkable earlier this year.
In short, the company is now largely profitable.
Lime said it was both operating cash flow positive and free cash flow positive in the third quarter — a first — and is on pace to be full-year profitable, excluding certain costs (EBIT), in 2021.

During the WSJ Future of Everything event Thursday, Lime CEO Wayne Ting painted a far rosier picture of the company’s future than one might have expected.
There was a time when Bird and Lime, competing domestic scooter rental companies, were raising capital at a torrid pace, fighting for market share, regulatory breathing room and sidewalk real estate. Then, the pandemic hit and the companies had to take shelter.
Lime underwent a round of layoffs in April, taking on capital from Uber the next month in a down-round that brought its valuation under the $1 billion mark. As it announced in a blog post that TechCrunch reviewed before publication, it paused most of its operations for a month during the early COVID-19 days.
“It was certainly a very, very tough decision for us earlier this year and I know we weren’t the only company during COVID,” Ting said during the event. “I think it’s been in so many ways helpful to us to realize how hard these choices can be. We’re going to be growing headcount again. We’re going to do so in a careful way so that we’re not going have to make hard choices like the ones we made earlier this year.”
Now things are better, Lime says. Much better. Indeed, the company claims that it is the “first new mobility company to reach cash-flow positive for a full quarter.”
Cash flow positivity, in general, is an important threshold for a startup to reach as it implies that the company can largely self-fund from that point forward, limiting its dependency on external cash for survival.
Lime also claims that it “reached EBIT positive at the company level over the summer.” The specifics of the phrase “EBIT positive” are important. Was the company employing strict EBIT on its math and not discounting share-based compensation, or was it measuring using adjusted EBIT as many startups do, removing the cost of share-based compensation that shows up in GAAP results? According to the company the number did exclude share-based compensation, making the news slightly smaller.
Perhaps the most bullish data point from Lime is that it expects to be full-year profitable in 2021. TechCrunch asked for specifics because again how one measures profitability matters. It turns out, Lime is basing this projection on EBIT, as opposed to more traditional net income. For a startup this is not a surprising decision, but before we declare Lime fully “profitable,” we’ll want some more GAAP metrics.
Still, it appears that Lime is not going to die, and is, importantly, putting capital into developing new products. The company provided the first example of that new product pipeline on Thursday with the launch of the Gen4 scooter in Paris. It also teased a so-called “third and fourth mode” in the first quarter of 2021 as well as the addition of a swappable battery.
The scooter company wouldn’t give TechCrunch much information about what these third and fourth modes will be. The first two modes are bikes and scooters, which leaves skateboards, cars, flying cars and boats?
Lime did give TechCrunch a little bit of clarification, stating that “move beyond,” means the company will be operating an additional mode, accessed through the Lime app, in line with its goal to serve any trips under five miles. These modes will build on the Lime Platform play, but this will be operated by Lime rather than a partner.

Jump bikes are now on the Lime app and heading to more cities

Lime has long discussed reaching profitability. Perhaps because it and its competitor Bird were infamous for their losses during their early unicorn period.
By November of 2019, Lime was talking about reaching EBIT positivity in 2020. But the start of 2020 was not kind on the company, with 100 of its staff losing their jobs and 12 markets getting dropped. At the time TechCrunch wrote that “Lime is hoping to achieve profitability this year by laying off about 14% of its workforce and ceasing operations in 12 markets,” with the company itself writing at the time that “financial independence [was its] goal for 2020, and [that it was] confident that Lime will be the first next-generation mobility company to reach profitability.”
Depending on how you measure profitability, that could be true.
Things didn’t get easier for Lime later in the year. Its competitor Bird underwent layoffs, and Lime cut more staff in April. At the time, Lime said that it was focused on coming “back stronger than ever when this is over.”
The company is certainly in better shape than it was in April and May. So, how did Lime come back from the brink? In its own estimation, the company took time during its pause to “drill down on getting the business right, narrowing [its] focus and strengthening [its] fundamentals.” That might sound like corporate babble, but by taking a nearly full stop in its operating business, Lime could probably see a bit more clearly what was working and what was not. And with some cuts to what wasn’t, it could set up a future in which its operations were leaner, and more unit-economically positive.
And, now, here we are asking niggling questions about just what sort of profit Lime is really making. Instead of, you know, who might buy its leftover office furniture. It’s a nice turnaround.

Lime touts a 2020 turnaround and 2021 profitability

Postmates cuts losses in Q2 as it heads towards tie-up with Uber

Popular food delivery service Postmates is in the process of merging with Uber in a blockbuster $2.65 billion deal that would see it join forces with its food delivery competitor, Uber Eats. The deal remains under antitrust scrutiny, and has not yet been approved for closing. The deal is expected to close in the first half of 2021.
However, a new SEC filing posted after hours this Friday gives us a glimpse into how Postmates is faring in the new world of global pandemics and sit-in dining closures across the United States.
Postmates posted a loss of just $32.2 million in Q2, compared to a loss of $73 million in Q1, nearly cutting its cash burning in half. That compares to Uber Eats’ results, which showed a loss of $286 million in the first quarter of 2020 and a loss of $232 million in the second quarter — an improvement of roughly 20%, according to Uber’s most recent financial reports.

Altogether, Postmates lost $105.2 million in the first half of 2020, compared to a loss of $239 million in the same period of 2019.
Uber through its filing today also disclosed the cap table for Postmates in full detail for the first time. On a fully diluted basis, the largest shareholder in Postmates is Tiger Global, which owns 27.2% of the company. Following up is Founders Fund with 11.4%, Spark Capital with 6.9% and GPI Capital with 5.3%. At Uber’s $2.65 billion all-stock deal, that nets Tiger Global roughly $720 million and Founders Fund roughly $302 million, not including some stock preferences and dividends that certain owners of the company hold.
While Postmates and Uber continue to go through the antitrust review process at the federal level, the companies also face legal pressure in their own backyards. Uber noted in its filing today that it and Postmates face headwinds due to California’s AB 5 bill, which is designed to give additional employment protections to freelance workers. However, the company notes that such litigation “may not, in and of itself, give rise to a right of either party to terminate the transaction.”

Postmates cuts losses in Q2 as it heads towards tie-up with Uber

Daily Crunch: Uber will require masks for drivers and passengers

Uber announces some COVID-19 related changes, Google’s Chrome browser is giving users a way to organize their tabs and the Senate rejects an amendment that would have raised the bar for law enforcement access to browsing data.
Here’s your Daily Crunch for May 14, 2020.
1. Here’s how your Uber ride will change, starting May 18
The changes — which include an online checklist for all rides, limits on the number of passengers in vehicles and a face mask verification feature for drivers — are designed to stop the spread of COVID-19, the company said Wednesday.
Riders and drivers, as well as delivery workers and even restaurants that use Uber Eats, will have the power to report unsafe COVID-19 behavior and give low ratings. For instance, a delivery worker can give feedback that a restaurant doesn’t have proper protocols in place, such as social distancing.
2. Google Chrome will finally help you organize your tabs
Google announced the launch of “tab groups” for the beta version of its web browser, which will allow you to organize, label and even color-code your tabs for easy access. The feature will make its way to the stable release of Chrome starting next week.
3. Senate narrowly rejects plan to require a warrant for Americans’ browsing data
Senators have narrowly rejected a bipartisan amendment that would have required the government first obtain a warrant before accessing Americans’ web browsing data. The amendment brought by Sens. Ron Wyden (D-OR) and Steve Daines (R-MT) would have forced the government to first establish probable cause (or reasonable suspicion of a crime) to obtain the warrant.
4. Kustomer acquires Reply.ai to enhance chatbots on its CRM platform
Reply.ai is a startup originally founded in Madrid that has built a code-free platform for companies to create customized chatbots to handle customer service inquiries. Its customers include Coca-Cola, Starbucks and Samsung.
5. Why we’re doubling down on cloud investments right now
Three investors at Bessemer Venture Partners argue that COVID-19 is a turning point for the cloud and cloud company founders, and that the cloud model offers businesses a promising future in the age of social distancing and beyond. (Extra Crunch membership required.)
6. Facebook, telcos to build huge subsea cable for Africa and Middle East
The project, called 2Africa, will see the companies lay cables that will stretch to 37,000km (22,990 miles) and interconnect Europe (eastward via Egypt), the Middle East (via Saudi Arabia) and 21 landings in 16 countries in Africa.
7. 7 top mobility VCs discuss COVID-19 strategies and trends
TechCrunch spoke to seven venture capitalists about how COVID-19 affected their portfolio and investment strategy, their current advice for startup founders and where they think the next hot opportunity will be. (Extra Crunch membership required.)
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

Daily Crunch: Uber will require masks for drivers and passengers

Uber president Jeff Jones is leaving the company amid turmoil

 Things just seemingly keep getting worse at Uber, which now is reportedly losing its president Jeff Jones according to Recode. The departure comes amid a series of sexual harassment allegations as well as being hit by a lawsuit from Waymo — Alphabet’s self-driving car unit — that threatens to potentially kneecap its autonomous driving efforts. Uber CEO Travis Kalanick… Read More

Uber president Jeff Jones is leaving the company amid turmoil

Travis Kalanick says Uber has 40 million monthly active riders

 Travis Kalanick says his drivers’ license is expired — though, of course he has to say that. But in Kalanick’s future, with a fleet of driverless Ubers shuttling people around, it might be that everyone’s drivers’ licenses will expire. His company, Uber, could essentially be a replacement for owning a car for Kalanick, and also for the 40 million monthly… Read More

Travis Kalanick says Uber has 40 million monthly active riders