Just after reporting one bike share company throwing in the towel, we hear that Zagster in the USA is flourishing and has just received $15 million in additional funding.
After our article about Gobee withdrawing from dockless programs in France, we asked Zagster why they are successful with their “Pace” dockless brand? Do we just have more vandals in Europe?!
Jon Terbush, communications manager at Zagster, gave us this answer. “Bike share – dockless bike share in particular – is a really exciting space to be in right now. There are a lot of smart, driven organizations looking to reframe what role bikes play in our daily lives and our larger transportation frameworks. With any rapidly growing space, there are bumps in the road and this kind of vandalism, unfortunately, is not unique to Gobee or European markets; it is prevalent among many similar US-based, free-floating dockless (meaning, dockless bikes that don’t lock to fixed objects, and can be left anywhere) bike share companies. To mitigate the problems that others in our space have seen — including theft, vandalism and improper bike parking — Pace features a lock-to dockless bike share model, meaning that our bikes must lock to things. It keeps our bikes secure and protects the public right of way, maintaining the convenience of dockless bike share with none of the drawbacks. We are seeing great success in our current partner markets here in the U.S., and, as our map shows, we are looking forward to expanding our programs nationwide.”
Edison Partners, a growth equity investment firm, had announced leading a new $15 million growth investment in Zagster, who – based on the number of schemes they have across the USA – are the leading American provider of modern, flexible bike share services over there. The company says that it will use these funds to expand sales and marketing efforts to meet customer and partner demand for its new Pace brand in additional markets.
Zagster has the largest number of bike-sharing sites in the U.S., operating more than 200 programs in 35 states and making its bikes available to more than 6.5 million people every day. Bike-sharing networks in the U.S. are a $2 billion addressable market as more municipalities and communities look to emulate the benefits of bike-sharing programs in cities like New York and Boston.
“Zagster built its business first, with more than 200 systems already established in close partnership with municipalities across the U.S. Their hybrid model — blending the predictability of dedicated bike racks with the freedom of not needing to use them — is unique, and their record of strong customer support and satisfaction appeals to communities looking for a best-in-class bike share program,” said Tom Vander Schaaff, General Partner at Edison Partners, who led the investment.
Edison has now invested $20 million in the company. Since Edison’s initial investment in January 2017, Zagster has experienced nearly 300 percent compound annual growth of its deployed bike fleets.
Vander Schaaff adds: “Zagster has strong logo additions, bookings growth and has also more than quadrupled its revenue over the last two years. They’re signing volumes of new customers and increasing existing accounts at a rapid pace and well ahead of plan. Our additional investment will enable their team to grow at scale and execute its model and new Pace brand across their existing and expanding footprint.”
Tim Ericson, Co-Founder and CEO of Zagster responded “We’re thrilled to have Edison by our side as we continue to scale our growth across new municipalities and markets. The Edison team has been instrumental in helping us refine our business model and go-to-market approach to differentiate Zagster and capture market share in the bike sharing space”.
Founded in 2007 and based in Cambridge, Mass., Zagster designs, builds, and operates bike shares for cities, universities and real estate properties. The company pioneered the smart bike platform that enabled bike sharing to flourish in communities of all types and sizes nationwide, with the platform enabling a scalable, turnkey managed bike and rack service that gives municipalities control to address their various maintenance, safety and regulatory needs. The company’s goal: “To make the bike the most loved form of transportation in every community”.
This map shows the cities in the USA where Zagster will be opening by June of this year and the States where they will have operations by 2019.
They have been successful compared with their competition: Urbanist estimated 0.68 rides per bike per day in Seattle & Streetsblog a much lower 0.18 rides per bike per day in Aurora, Colorado. Zagster came in at 1.7 rides per bike per day in Rochester, NY.
In the first 90 days of service, the Zagster Pace beta test in Rochester showed 800% higher ridership.