Luxury electric carmaker Karma has found a lifeline with $100 million in new funding as the company and its parent look to cash in on the popularity of Tesla in order to raise $300 million, Bloomberg reported.
The Chinese-owned company formerly known as Fisker Automotive has struggled to break out in the capital-intensive world of carmaking. Owned by auto-supplier Wanxiang Group, which bought the company in 2014, Karma is selling stakes to private equity partners, according to the report. By raising cash from U.S. investors, Karma officials aim to reduce Chinese ownership below 50%, making it easier to win government fleet contracts.
<p>A Karma spokesperson confirmed the deal but said the company would not release details because it has signed non-disclosure agreements with their investors. </p><p>But the president of Wanxiang's U.S. business Pin Ni told Bloomberg that "Karma has real production, real technology and real dealers." </p><p>"Look at Tesla's value and you see Workhorse with their stock going up ten times recently." He denied recent media reports the company was near bankruptcy. </p><p>Karma is best known for its $135,000 Karma Revero. Last February the company <a href="https://dot.la/karma-automotive-layoffs-irvine-2645141964.html" target="_blank">laid off 60 workers</a> in a move to restructure its business. At the time, it said it was billing itself as a "high-tech mobility incubator" that can manufacture, design and engineer for larger car manufacturers that are sinking billions of dollars into capital for new green cars. Several new executives were also brought in. In April, the company went through another round of layoffs. According to state data, 60 people were let go. <em></em></p><p><em>This story was updated at 2:55 pm PST with a comment from a Karma spokesperson. </em></p>
From Your Site Articles
- Los Angeles Could Soon See More Jobs in the Electric Vehicle ... ›
- Karma Automotive Lays Off 60, Mostly in Irvine - dot.LA ›
Related Articles Around the Web
Read more
Show less
Riders Share is AirBnB for motorcyclists.
The motorcycle rental platform that launched two years ago as a way to help fanatics enjoy a ride without the high cost has now raised $2 million in Series A funds led by LiveOak Venture Partners.
Created by a UCLA alumna, Riders Share will use the cash infusion to expand their customer service and marketing, along with developing new products. The company operates a sharing platform where users can rent out their own motorcycles or rent someone else's. Based in Austin, the company already has more than 10,000 listings. Los Angeles, where it was born, is among its largest market.
<p>The idea for the Riders Share came to founder Guillermo Cornejo — who has worked as an analyst for Nissan Motors, General Motors and Hyundai — after experiencing sticker shock when he tried to rent a motorcycle himself. </p><p>"You know, bikes, they are not really sophisticated," said Cornejo. "They are more like a toy that you use on the weekend for fun. And when I tried to rent one, it cost over $200. That's when I started looking into rentals as a way to make motorcycles more affordable," </p><p>The company is among a growing list of car-sharing companies such as Turo competing in a crowded marketplace. Cornejo says that since the pandemic broke out, he's seen a jump in motorcycle rentals. He suspects many of them are using the vehicles to deliver food, as demand for delivery services has risen amid stay-at-home orders. </p><p>The average rental fees range from $36 to $97 per day. The company rents everything from Harley-Davidson to Triumph, Ducati to Honda motorcycles. </p><p>When it first launched Cornejo only had $20,000 to invest into Riders Share, which made it difficult to grow.</p><p>"It was really hard. We had $40,000 in credit card debt," he said. "I had pitched my business and no one wanted to invest."</p><p>Originally from Peru, Cornejo attended UCLA's Anderson School of Business. There he began to build a network including investors. He lucked out when he entered a pitch competition at the university and scored his first investment, which eventually led him to Los Angeles TechStars. </p><p>The biggest obstacle for Riders Share was insurance costs, which can be high for motorcycle riders.</p><p>Riders Share renters and owners are covered by the company's insurance. The company uses machine learning to understand the background of their riders, which Cornejo says can drive down insurance costs by as much as 50%. </p><p>If the driver has their own insurance, they are free to use that instead. </p><p>"Guillermo and the Riders Share team have managed to address the insurance risk problem while also bringing motorcycle owners and renters together all across the United States, and they did so with very little help," said David Stewart, Venture Partner at LiveOak Venture Partners. "We are confident we can help Riders Share scale and modernize the way people interact with motorcycles."</p><p>Cornejo moved his business to Texas, home to several similar companies where, he says, costs would be cheaper. </p>
Related Articles Around the Web
Read more
Show less
Santa Monica-based Bird could benefit from a post COVID-19 world where fewer people are using public transportation, especially in urban areas in Europe and Asia where car ownership is more expensive, according to an optimistic new research note published by Pitchbook.
"We believe the thesis for shared mobility remains intact, and expect public aversion to mass transit to drive a $15 billion addressable market expansion for the industry," Asad Hussain, an emerging technology analyst at Pitchbook, wrote late Wednesday . "Anecdotally, we are hearing of an uptick in interest in mobility among investors seeing the light at the end of the tunnel."
<p>As of earlier this month, public transportation ridership was down approximately 70% in the U,S and 80% in Italy and France. <a href="https://thesource.metro.net/2020/05/14/metro-to-pursue-four-phase-plan-to-restore-bus-and-rail-service/" target="_blank">Metro ridership in Los Angeles has fallen</a> from about 1.2 million average weekday boardings to 360,000.</p><p>Scooters have often been billed as a compliment to public transportation, <a href="https://urbanmobilitydaily.com/has-public-transit-finally-found-its-first-mile-last-mile-partner-in-micromobility/" target="_blank">helping riders reach the "last mile."</a> However, Bird is already seeing evidence riders are replacing buses and trains with scooters, a habit the company is optimistic will stick. Bird also hopes that the <a href="https://www.nbclosangeles.com/news/local/las-slow-streets-program-closes-streets-to-provide-space-for-activity/2363020/" target="_blank">closing of city streets during the pandemic</a> could make using scooters more appealing since they have always struggled with being too fast for sidewalks and too slow for weaving in and out of vehicle traffic.</p><p>"Over the past month, we've seen sustained increases in trip duration of more than 50%," wrote Ryan Fujiu, chief product officer at Bird <a href="https://www.bird.co/blog/scooter-riders-making-comeback-riding-longer-than-ever/" target="_blank">in a blog post.</a> "Initially we attributed this to a desire to be back outdoors experiencing fresh air and open space, but we're seeing strong indications that it may be a much longer-term trend related to things like public transit concerns nearly a thousand miles of new open streets and a spike in the construction of protected cycling infrastructure."</p><p>Last month, cash-strapped Lime <a href="https://www.google.com/search?q=lime+raised+funding&oq=lime+raised+funding&aqs=chrome..69i57j69i59j69i60l3j69i61j69i65j69i60.2675j0j9&sourceid=chrome&ie=UTF-8" target="_blank">raised emergency funding at a steep 80% discount</a>, with Uber as the lead investor. Bird had the good fortune to raise new financing this year before the coronavirus slashed valuations but still has tried to preserve cash, <a href="https://dot.la/bird-layoffs-meeting-story-2645612465.html" target="_self">laying off 40% of its workforce in a widely criticized Zoom call at the end of March.</a> More deals and consolidation could likely be ahead. </p><p>"The pandemic will exacerbate a trend that we were already starting to see early signs of, which is consolidation in the industry," said Daniel Hoffer, managing director of Autotech Ventures.</p>Meanwhile, <a href="https://twitter.com/BirdRide/status/1265649858968317953" target="_blank">Bird unveiled its latest new feature Wednesday called Quick Start,</a> which allows riders to activate a nearby scooter via bluetooth on their mobile phone simply by walking towards it instead of scanning a QR code. Bird says early testing shows the new process, which is gradually being rolled out to markets, cuts the time it takes to unlock a scooter in half.
From Your Site Articles
- Lime Temporarily Shuts Down in California Due to Coronavirus - dot ... ›
- Bird Acquires European e-Scooter Company Circ, Raises $75 ... ›
- Here's How Bird Laid Off 406 People in Two Minutes - dot.LA ›
- Bird Pay Will Let Scooter Users Purchase From Local Vendors - dot.LA ›
Related Articles Around the Web
Read more
Show less