Transport app Citymapper launches its first crowdfunding after the pandemic stopped 90% of users in their tracks
- Citymapper will appeal to retail investors in a crowdfunding campaign over the coming weeks.
- The loss-making transport app said it had planned to crowdfund last year but said it “wasn’t the right time”.
- Nearly 90% of Citymapper users stopped travelling at one point last year due to the pandemic.
- See more stories on Insider’s business page.
Popular transport app Citymapper is set to open a crowdfunding round that will allow retail investors to back the startup for the first time.
Prospective investors can now register their interest in backing the loss-making app, which will be issuing a limited number of shares. Citymapper did not reveal how much it intends to raise from the round, nor has it said how much the shares will cost.
The London-headquartered firm, founded by ex-Google employee Azmat Yusuf in 2011, has long struggled to turn a profit. In an update on Thursday, the firm indicated that its business was battered by the pandemic last year when at one point nearly 90% of its users had stopped travelling.
The free app has built a network of hardcore fans who believe it to be the best way to figure out travel routes across more than 80 cities, including London, New York, and Milan.
Citymapper recorded losses of £8.96 million ($12.49 million) on revenues of £5.79 million in 2019, according to its most-recent accounts.
The company has made numerous efforts to drive new revenue streams, including the introduction of a prepaid travel pass to allow users to access discounted travel as well as a failed attempt to run a bus service in 2017.
The business currently makes money through its travel pass, a mobility subscription service called Club, as well as an affiliate arm that promotes other private transport apps such as ride-hailing service Ola. Citymapper also licenses its routing and transport technology through APIs to other companies, operators, and local authorities. It insists it does not sell personal user data.
The company claims to have more than 50 million users across the world as well as the “best data factory” and the “best routing algorithms”.
On its crowdfunding page, Citymapper also outlined its plans to introduce all private modes of transport to the app, including escooters, cabs, and bicycles.
The company said it raised capital from institutional investors last year and that it had planned to crowdfund then but felt “it was not the right time due to the uncertainty of the pandemic”.
“We’ve always liked the idea of having users as shareholders,” Citymapper said in its update.
“Now with cities reopening we believe the timing is more appropriate to complete the crowdfunding portion of the round, as well as a good moment to update everyone on our progress and plans.”
The company said it would value the business at the same level of its 2020 financing but did not reveal how much this was.
Citymapper said that as journeys began to plummet during the pandemic it invested heavily in walking, cycling, micromobility, turn-by-turn directions, and voice navigation. It also said it increased its coverage across Europe and the US.
The company’s crowdfunding campaign will go live on Crowdcube over the coming weeks. Citymapper hopes a host of new backers will join the likes of Index Ventures, Balderton Capital, Benchmark Capital, and LocalGlobe as investors in the company.
“You may get a return through an IPO, sale or merger of Citymapper or if Citymapper starts paying dividends,” it told would-be investors. “Additionally, there may be opportunity for secondary sales in future financing rounds. However please be aware that investing in startups is risky.”
The most-recent loss making British app to IPO has proven unpopular since its open earlier this month. Shares in Deliveroo, which recorded losses of $309 million in 2020, slumped as much as 30% when it made its public bow.
The company was widely rumored to be looking for a buyer in early 2020, but an acquirer has yet to materialize.
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