A scooter company is turning to cryptocurrency to raise $125 million instead of getting traditional investors
While scooter startups Bird and Lime are courting top Silicon Valley investors, Spin is looking to raise money in a different way: making its own cryptocurrency.
The news was first reported on Friday by TechCrunch and confirmed to Business Insider by a person close to the company.
Spin is raising $125 million via a Secure Token Offering, although the company hasn't officially listed its tokens for sale on an exchange yet. The person told Business Insider that it may list on muliple cryptocurrency exchanges, but it is waiting for more mainstream exchanges like Coinbase to support STOs.
During an STO, a new idea that is widely seen as a safer version of an Initial Coin Offering, investors will be able to buy Spin's tokens â a unit of cryptocurrency. Rather than getting a liquid asset, though, would-be purchasers of the Spin STO would be buying equity in Spin. We hear that, indeed, a portion of Spin's tokens will be backed by equity in the company.
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The report comes a day after rival startup Bird announced $300 million funding round from some of Silicon Valley's preeminent venture firms, valuing the company at $2 billion. Investors see e-scooter companies as the next Uber and Lyft, and are clamoring to get in on the ground floor on the business.
To date, Spin has raised $8 million in a series A round led by Grishin Robotics. The company has launched in 18 cities and a number of college campuses. And while Bird and Lime have had testy histories with city officials â who claim the scooters descended on cities with little-to-notice â Spin has been relatively quiet after it was first issued a cease and desist letter in San Francisco.
Electric scooters work by allowing users to reserve a nearby scooter via a smartphone app, ride around on it for a small fee, and, at the end of the journey, leave the scooter anywhere to be claimed by the next rider.
