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SoftBank-Backed Tier Plans to Charge Its E-Scooter Batteries in Local Shops

Tier
  • Mobility start-up Tier has a grand plan to charge the batteries that power its rental e-scooters and mopeds in shops around the world.
  • The company is planning to use some of the $250 million it raised from SoftBank and other investors last November to install battery charging stations in 4,500 shops in the next 12 months.
  • "We already have signed up a lot of stores," said Lawrence Leuschner, CEO and co-founder of Tier, in an interview with CNBC held via Zoom.

LONDON – Tier, the Berlin mobility start-up backed by Japanese tech behemoth SoftBank, has a grand plan to keep its rental scooter batteries full of juice: power them in local stores.

The company is planning to use some of the $250 million it raised from SoftBank and other investors last November to install battery charging stations in 4,500 shops around the world in the next 12 months.

"We already have signed up a lot of stores," said Lawrence Leuschner, CEO and co-founder of Tier, in an interview with CNBC.

The 37-year-old entrepreneur said the required charging pods, known as PowerBoxes, are roughly one meter squared, and can run off a standard plug socket. He added that Tier will pay for the electricity that the shops use to charge its batteries. Tier claims the PowerBoxes can charge four batteries in three hours.

To swap a battery, users must open the Tier app on their phone and check if the battery of the scooter they are riding or the battery of a scooter nearby needs to be swapped, which is indicated by a lightning icon.

They must then ride to the nearest "SwapSpot," which is shown in the Tier app, remove the battery by pushing a button, go into the store, and exchange it for a fully charged one. 

What's in it for riders and shops?

Riders who swap the e-scooter batteries after they've completed their journey are rewarded with a free ride, while shopkeepers benefit from increased footfall and — hopefully — revenues, according to Leuschner.

"The stores where we are swapping the batteries get significant (extra) revenues of roughly 20,000 euros ($24,200) a year because every time somebody swaps a battery in the store, they buy something," said Leuschner. Tier said the figure is based on the average spend of battery swappers in shops and local businesses over a month-long period during a trial in Tampere, Finland, last summer.

Approximately 50 shops have already installed Tier's charging stations following the trial last summer, and the company is now rolling out the charging pods to other countries that it operates in.

Tier plans to equip all of its vehicles with batteries made by Swedish battery manufacturer Northvolt.

Leuschner said Tier eventually wants to open the energy network so that other electric vehicle operators can use it to power their own batteries.

European rival

Founded in 2018 as a European competitor to the likes of Bird and Lime in the U.S, Tier has rolled out electric vehicles across 85 cities in nine countries.

It aims to expand its fleet of e-scooters and mopeds from 60,000 to over 100,000 by the end of 2021, and the company is planning to launch an undisclosed new vehicle around the third quarter of this year.

In order to pay for new vehicles, Leuschner said Tier is in the process of securing a new round of debt funding. "We are currently in discussions," said Leuschner, adding that the company has had a number of different offers. 

Tier had a challenging 2020 as the coronavirus pandemic forced nations into lockdown, taking potential customers off the streets in the process. However, the company was "almost profitable" for the year, according to Leuschner. "That's why SoftBank invested in us," he said.

Looking ahead, Leuschner is trying to prepare for after the pandemic, as are European competitors like Voi and Dott.

"We hope that the vaccinations work and things go back to normal. Then we hopefully have a great spring, summer, autumn, and a stronger winter than last year. We will definitely grow pretty strongly in 2021 versus 2020," he added.

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