The encyclopedia · Strategy & Leadership · Strategic decision · 2017–2021
Skip built the premium shared scooter — then Hit Chapter 7 with a $131M war chest burned
Skip spent heavily on sturdier, costlier scooters, raised $131M to fund the fleet, and went bankrupt when the market refused to pay for the extra quality.
Skip · 2021-08-04
What happened
Skip was founded in 2017 in the San Francisco area by Sanjay Dastoor, who had previously built electric longboards at Boosted. It launched in 2018 out of the Y Combinator accelerator and positioned itself as the more careful entrant in the scooter-sharing gold rush: sturdier scooters with larger batteries, instructional classes, and a habit of working with cities before rolling out.
The premium bet drew believers. Skip was one of only two scooter companies to win an operating permit in San Francisco and the first to arrive in Washington, D.C., and it raised at least $131 million to put those heavier, costlier scooters on the streets of multiple cities.
The last-mile economics never closed. Investors pulled back after pouring $4.8 billion into scooters in 2018, ridership fell, and the pandemic cut the market hard. Micromobility startup Helbiz took over Skip's US operations in late 2020, and on August 4, 2021, Skip filed for Chapter 7 bankruptcy in the Northern District of California, the first liquidation by a well-known multi-city scooter company.
Why it happened
- Premium hardware scaled badly: Skip's sturdier, larger-battery scooters cost more per unit, so every city added meant a bigger bill than leaner rivals paid.
- The market would not pay for the difference: customers ride the cheapest scooter on the corner, so Skip's extra quality earned no premium at the fare box.
- The capital tap ran dry: after 2018's $4.8 billion scooter funding boom, investors pulled back and Skip had no new money to keep the fleet rolling.
- A pandemic-crushed rideshare: lockdowns cut ridership sharply, and a company already losing money on every ride had no volume to mask the losses.
The lesson
In a commodity market, the premium product is the loser. If riders choose the cheapest scooter, spending more on a sturdier one is a cost nobody reimburses — win by being the cheapest, not the best.
Aftermath
Helbiz took over management of Skip's US scooter network in late 2020, citing a way to enter the US market after the pandemic. Skip filed for Chapter 7 bankruptcy on August 4, 2021 in the Northern District of California, listing assets of $50–$100 million against liabilities of $10–$50 million. It was the first bankruptcy by a well-known multi-city scooter company, and its scooters were pulled from San Francisco and Sacramento while a few smaller fleets briefly kept running under Helbiz.
Sources
- Quartz, July 2022 — A scooter pioneer has just filed for bankruptcy (Skip launched 2018 from Y Combinator, raised at least $131M, was one of two scooter companies to win an SF operating permit and first in Washington DC; Helbiz acquired an operating license to manage Skip's US scooters in Dec 2020; Skip filed Chapter 7 on Aug 4 2021 in Northern California with assets $50–$100M and liabilities $10–$50M; scooter ridership peaked 2019 and investors pulled back)
- Smart Cities Dive, 10 August 2021 — E-scooter company Skip files for Chapter 7 bankruptcy (Skip filed Chapter 7 in the US Bankruptcy Court for the Northern District of California, the first bankruptcy by a well-known multi-city scooter company; Helbiz acquired Skip late 2020; scooters were unavailable in San Francisco and Sacramento, with Jacksonville, Miami, Oklahoma City, Washington DC and Waterloo still listed)
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