On Wednesday, the San Mateo, California-based bike share startup LimeBike announced in a press release that it had raised $12 million in Series A funding, primarily from the Andreessen Horowitz venture capitalist firm, to help bring a new concept to the United States: kiosk-free bike sharing.
Kiosk-free bike sharing is a concept that has become increasingly popular in China in recent years but that is just starting to take hold in the United States.
As Forbes reports, LimeBike is just the latest startup to attempt to solve what Forbes calls the “last mile problem” — that is the problem that many traditional bike sharing programs face when, even after parking at the closest bike share kiosk, users still have to walk multiple blocks to their final destination.
LimeBike, like its competitors, attempts to solve that conundrum by building a network of cheap bike rentals that you can find, rent, park and lock up anywhere using its smartphone app which relies on GPS trackers and QR codes.
With LimeBike, users can look at a map of all available bikes near them on their smartphone, walk to the closest bicycle and unlock it by scanning a QR code on the back of the bike. Once they have arrived at their destination, users end their ride by locking the bike up with a lock built into the bike’s frame.
The rides on the bike sharing app are cheap — Lime Bike only charges $1 for every 30 minutes on a bike — making them perfect for urban commuting.
“If all of the sudden you take the friction out of the bike experience and make the bikes more convenient, better located and cheaper, I think [kiosk-free bike sharing] could really take off,” Andreessen Horowitz partner Jeff Jordan, who will now be on the board at LimeBike, told the Silicon Valley Business Journal.
As Jordan mentions, the market for bike sharing is ripe for innovation: Per a 2015 report by Roland Berger Consultancy, the bike sharing industry could be worth around $6 billion by 2020.
Per USA Today, however, as of 2014 less than 1 percent of all Americans biked to work.
“Bike networks will hit a tipping point when we make bicycles widely available and universally affordable,” Toby Sun, LimeBike's CEO and co-founder, said in his press release. “When we begin to have bikes within a couple of blocks and only pay a small amount to access them, we can turn the bicycle into a mass transportation network and redesign our cities for people instead of cars.”
To succeed, however, LimeBike will have to face off with some heavy competition: Its two largest competitors, Chinese startups Ofo and Mobike, have collectively raised over $600 million in capital since the start of 2017.