Bonnie Arbittier / Rivard Report
After stumbling out of the gate and encountering a few roadblocks, Blue Duck Scooters is set to purchase as many as 40,000 new dockless electric vehicles and expand its scooter-share services across the Southern United States.
San Antonio-based Blue Duck closed on a $3.5 million funding round Oct. 27 after receiving a $75 million valuation, President Eric Bell said. On Saturday, the company's eight-month anniversary, it secured a $15 million loan to purchase 35,000 to 40,000 additional scooters. Bell told the Rivard Report that Blue Duck plans to deploy them all within six months.
"We have the ability to deliver at least 1,000 scooters a day wherever we want," Bell said.
The amount of capital Blue Duck is raising and its ambitious plans to become one of the premier scooter-share providers in the Southern U.S. is raising eyebrows in the San Antonio tech community, a market that has not produced many consumer-facing startup successes. Its plan to focus on college campuses, however, faces some obstacles, as two college markets have removed Blue Duck's scooters and banned them from their campuses.
Blue Duck was not the first to launch in downtown San Antonio, having been beaten to the punch by competitors Bird and Lime, but it believes it has an edge on those operators when it comes to The University of Texas at San Antonio's main campus on the North Side. UTSA could provide a blueprint for launching in college markets – such as College Station, where the company was set to launch Saturday, Bell said. He would not disclose additional locations being eyed for launches.
"UTSA has been fantastic in allowing us to operate there and be able to provide real solutions to people," Bell said.
Blue Duck began to execute its college market-focused strategy in August when it released e-scooters near Texas State University in San Marcos and Southwestern University in Georgetown. Unlike its rollout in San Antonio, which entailed formal and informal communication with the City of San Antonio before launching, Blue Duck decided not to seek permission or inform schools ahead of time about the launch. School officials on both campuses impounded Blue Duck's vehicles.
A Texas State University spokeswoman said the scooters are not authorized on campus, but the university is preparing to solicit bids and will select one e-scooter operator to provide services. On Friday, the geolocation feature of Blue Duck's app did not show any vehicles in San Marcos.
Southwestern University Police Chief William Dunn said the private university, which serves about 1,500 students, already has a bike-share program, and with students also bringing their personal bikes onto campus, Southwestern cannot support more two-wheeled vehicles, such as scooters.
Dunn is also concerned about safety, as emergency rooms in the Austin area have seen an uptick in scooter-related injuries, he said.
"There's a lot of questions that have to be answered before you can just let a bunch of scooters loose on campus," Dunn said. "Safety is our No. 1 goal."
Even though Texas State and Southwestern have not panned out, Bell said the company remains confident in its college-centric growth plan.
"We still believe large public universities below the Mason-Dixon line are a relative goldmine to the micro-mobility movement that's unfolding in the U.S. right now," Bell said.
To expand rapidly, the company has ramped up its hiring. Blue Duck is staffed with 25 full-time employees and has attracted such local talent as new Chief Technology Officer Drue Placette, Chief Financial Officer Farooq Malik, and Michael Keane, who runs the company's operations.
The growth the company is hoping to achieve is not possible with a presence only in San Antonio, Bell said. Blue Duck has a lease agreement in Los Angeles to open a new office there, he said, in part to hire more skilled engineers and plant its flag where Bird is based and several other companies operate. Its headquarters will remain in San Antonio, Bell said.
"We have to grow and scale along with the size of our scooter fleets," he said. "And we can't pigeonhole ourselves into just doing it here, because that's a recipe for trouble for us in the near term, much less the long term. ... This isn't fight or flight, this is a street fight among scooter companies, and we have to and will always continue to be competitive without losing our sense of self and our sense of home."
On top of its misses in San Marcos and Georgetown, the startup has encountered other obstacles along the way. As the company worked to straighten out its supply chain, a Long Beach, California, supplier shipped a batch of "fraudulent" scooters to San Antonio, hindering Blue Duck's momentum. Bell said Blue Duck is seeking restitution from the supplier.
Despite those problems, Blue Duck's funding success could put it in select company for San Antonio business-to-consumer tech companies. Michael Girdley, managing director of San Antonio venture capital firm Geekdom Fund, said he knows of no other local company that has raised capital at a $75 million valuation – at least for funding rounds that have been publicly disclosed.
By comparison, Lime and Bird have raised hundreds of millions of dollars in venture capital. Lime is valued at about $1 billion, and Bird received a valuation north of $2 billion in its most recent funding round, according to recent reports. The startup database Crunchbase, which aggregates venture capital funding rounds, indicated that some of the San Antonio startups that have raised comparable amounts of capital include Merge Labs, which develops virtual-reality gear and has raised a total of more than $11 million, and analytics firm Keen.io, which has raised $29.2 million in five funding rounds.
"It's a great level of validation for what's going on in San Antonio," Girdley said. "People going after big ideas and raising money is a good thing for everybody [in the San Antonio tech scene]."