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This post is also available in: Español (Spanish)

Micro-mobility startups struggle in Latam amid pandemic

This post is also available in: Español (Spanish)

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Contxto – Everyone is staying home. And your traditional brick-and-mortar shops aren’t the only ones struggling with the coronavirus outbreak.

The disease also poses an additional obstacle for micro-mobility startups who were already grappling with trying to reach profitability, as Contxto has been reporting throughout this year.

San Francisco-based Lime is the latest to announce that due to the pandemic, it will be hitting “pause” on its operations in Brazil and Chile as well as in 21 other countries.

All the while, Latam’s Grow Mobility has been very, very, very quiet. But its eerie silence says more than you think and more than it cares to share.

Related article: E-scooter startup Lime retreats in Latam, a warning sign for Grow?

Lime pulls over

Users in 23 countries will cease to see Lime’s bright-colored e-scooters for a while. 

In an announcement made last Tuesday (17), one of the most well-known startups in the industry stated it would be pulling its scooters from the streets of Brazil, Chile, the US, UK, among others.

Initially, it sought to improve its cleaning methods for its e-scooters. But as the situation, by which I mean the spread of coronavirus continued, it ultimately decided to stop operations altogether in these specific locations.

It does continue to operate in other markets like in New Zealand and South Korea though.

Related article: Grow’s woes: Mobility app officially announces acquisition talks

Growing rumors

The largest micro-mobility startup from the region is Grow Mobility. However, the giant has held a stony silence as to ongoings.

The only thing we officially know is that it’s been looking to be acquired, as previously reported by Contxto’s Word Wizard, Alex González Ormerod.

Beyond that, it’s smoke and misinformation that would put Mean Girls’ gossip Gretchen Wieners to shame.

In early March, it appeared Peixe Urbano—an e-commerce company from Brazil—was interested in buying Grow

Then, over a week ago, a rumor surfaced that venture capital (VC) firm, Mountain Nazca bought the startup.

These dealings were supposedly being arranged by Felipe Henriquez Meyer, who co-founded Mountain Nazca. But then, plot twist!

Héctor Sepúlveda, Managing Partner at Mountain Nazca came forward on social media and said the VC is not associated at all to the goings-on between Peixe and Grow.

Curious as to the reasons behind the mixup, Contxto reached out to Sepúlveda.

Mountain Nazca speaks out

“All this confusion must have emerged because Felipe Henriquez was the Managing Partner at Nazca in Chile some time ago,” stated Sepúlveda in written correspondence.

“And after which he bought Groupon-Latam/Peixe. Many years after that acquisition and years after leaving his role as Managing Partner at Nazca in Chile, they must have decided to buy out Grow.”

Sepúlveda went on to clarify that he doesn’t know the conditions under which negotiations are being carried out between the parties.

“But I can assure you that beyond our friendship with Felipe, we have nothing to do with it.”

The VC’s statements are pretty clear. What isn’t is all the hubbub going on at Grow. Contxto has contacted Grow, but thus far no names have been dropped as to a potential buyer.

What’s up, Grow?

However, given Lime has hit pause on its ops, if the pandemic in Latam worsens, Grow may face a similar scenario. It’s a very tough decision all for the sake of riders’ health.

For now though, it’s stated on social media that its scooters are actually a safer option than mass public transit. 

“And that’s why we’ve taken some measures [like] lowering our prices to ease access to our vehicles, [implemented] processes to improve hygiene, and reducing the likelihood of infection from the team and users,” stated Grow on its LinkedIn page. 

Fingers crossed that the situation improves and no drastic measures are needed on Grow’s end. However, the next couple of weeks don’t look too bright.

I guess it’s like the saying goes, “hope for the best, prepare for the worst.”

Related articles: Tech and startups from Brazil!

-ML, AG, SB

Mariana López
Eager learner and fervent asker of existential questions. My topic darlings are startup management, edtech and all things pop-culture. If you don't see me smiling, I'm probably just hungry. J Balvin is Latin America's best reggaetonero and I dare you to convince me otherwise.

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