Ten years ago, much of micromobility was still a vision. Investors were drawn to the promise of cleaner cities, electrification and shared mobility and capital flowed into the sector on the back of that vision.
Today, the industry is far more mature. While growth has been significant, so too has the number of companies that have failed or exited the market. Business models have been tested, investors have become more selective and the days when a compelling vision alone could secure funding are largely over. A founder can no longer rely on being part of a promising trend or on polished renderings in a pitch deck to attract investment.
So what does it take to raise capital in micromobility today?
At Micromobility Europe in Berlin, Zag moderated a panel with three mobility investors to answer exactly that.
Peter Vest, Senior Investment and Asset Manager at EIT Urban Mobility; René Wiertz, Founder and Managing Partner at Fundracer; and Thijn Van Helvoirt, General Partner at No Such Ventures shared an unfiltered look at what catches their attention, what raises red flags and why some founders secure their funding while others fall short.
The biggest mistake a micromobility founder can make
Zag’s Editor and session moderator Sela Musa opened the discussion by asking the panel what they believe is the biggest mistake founders make when seeking early funding.
For Wiertz, it’s failing to tailor a fundraising pitch to the stage of the company.
“If you’re raising money for a seed round, you won’t usually have the metrics to show so you have to sell the story,” Wiertz told the audience. “If you’re raising for a Series E, you will have the metrics and so you have to focus on the facts. The stage you’re funding for is essential to get your story right.”
Van Helvoirt agreed that early-stage founders often need to sell a vision before they have the numbers to back it up. But he argued that too many entrepreneurs use that as an excuse.
“A mistake many founders make, which I think is lazy, is they assume that in a very early stage the only thing that matters is vision,” he said.
“It’s either lazy or less creative. You can always find ways to validate your model. You can call 10 potential customers and if you can call 10, you can call 100. Find out whether they would actually use the product. Not only are you showing some signal of consumer appetite. You’re also showing investors that you don’t just have a vision but that you’re genuinely interested in the answer to what will make your company work.”
For Vest, the pitfall he too often sees is founders becoming overly focused on valuation too early in the process. He recalled incidents of valuation growth “getting ahead of actual business fundamentals” leading to a likely down-round when scaling.
“Don’t be too afraid of losing a few per cent in the early stage,” he said. “Revenue builds valuation. Valuation does not build revenue.”
Metrics that matter
One theme that united all three investors is an increasing reluctance to back businesses that cannot demonstrate genuine commercial traction.
“The first metric for us is revenue. The second is revenue and the third is revenue,” Vest said.
But the type of revenue is just as important as the figure itself.
“You could have recorded €1 million in revenue last year but if €500,000 was from grants then that’s a different story compared to €1 million of commercial revenue,” Vest added.
Van Helvoirt agreed, stressing that the quality of revenue matters just as much as the quantity.
“What I want to see is that a company that’s already generating money is projecting future growth based on the type of revenue they’re already collecting today,” he explained.
“What I don’t like to see is a company saying they have €500,000 in revenue but it’s all project revenue and in their business case they’re projecting licenses. They have the revenue but there’s no proof that the type of revenue they need for the business case is actually there.”
Wiertz agreed, adding that one of the biggest red flags is a pitch built on projections without any evidence that the team can execute.
“A deck full of renderings by a team that has never built a company or built anything – that is definitely a red flag for us,” he said. “Anybody who has built a company knows how hard it is and how much persistence you need.”
What makes a micromobility company stand out?
According to Van Helvoirt, too many founders focus on innovation as the primary way to differentiate themselves. Instead, he believes the real competitive advantage often lies elsewhere.
“Distribution, distribution, distribution. And then execution, execution, execution,” he said.
Rather than obsessing over product differentiation, he argued that founders should concentrate on proving they can efficiently get their product to market and scale it successfully.
“Europe has historically been very good at innovation and very bad at commercialisation,” he added.
Vest offered a slightly different perspective. For EIT Urban Mobility, innovation remains a core investment criterion but only after the fundamentals are in place.
“If you’re on top of all the basics, then you can add something where you stand out compared to the rest of the market,” he said. “For us, that other thing must be related to innovation.”
On the kinds of innovation he would like to see more of, Wiertz pointed to technology adoption within micromobility including greater use of IoT, ABS systems and other technologies already common in the automotive sector. Fundracer’s portfolio largely consists of companies bringing automotive safety features to two-wheelers, like airbags from Aerobag and Luna System’s AI-powered camera for bikes.
What investors don’t want to see
The discussion concluded with a look at the kinds of products and pitches the three investors feel the market no longer needs.
For Wiertz, simply launching another e-bike brand is unlikely to attract attention unless there is a genuinely unique feature or proposition behind it.
Van Helvoirt agreed but returned to his earlier point that differentiation does not always require a radically different product but rather stronger execution.
Vest’s answer focused less on products and more on fundraising materials. He said he has little patience for Letters of Intent and Memorandums of Understanding – agreements that are non-binding – describing himself as “personally allergic” to them.
Despite the growing scrutiny investors now apply to micromobility businesses, the panel ended on an optimistic note. The era of funding based purely on vision may be over but as the industry continues to mature, the willingness to back ambitious founders remains very much alive.
As Vest concluded: “We still prefer to see one pitch deck too many than one too little.”
