Embattled local e-scooter company Blue Duck Scooters, which missed out on a key opportunity to keep operating in San Antonio beyond this fall, has secured an additional $4.2 million in funding, the company announced in a press release Tuesday.
The San Antonio-based scooter-share startup closed on the crowdsourced funding round ahead of a targeted $25 million to $30 million funding haul, according to company documents obtained by the Rivard Report. Blue Duck operates scooters in San Antonio, Laredo, and Corpus Christi.
Last week, the company announced its next market would be in the City of Bryan, near the Texas A&M University campus. Blue Duck Executive Chairman Paul Bell said in a statement the funding would help launch in additional cities in Texas and the Southern United States.
“Investors continue their strong support of the growth of Blue Duck and the expansion of our business both into previously planned and recently targeted markets,” Bell said in the statement.
After failing to meet a July 22 deadline to bid for one of three City scooter-share permits, Blue Duck faces an uncertain future in San Antonio. But contrary to previous statements by Bell’s son and co-founder, former CEO Eric Bell, the company is not considering moving its San Antonio headquarters in the wake of the City’s refusal to accept Blue Duck’s bid. The company’s paperwork was time-stamped at 11:01 a.m. on July 22, one minute after bids closed.
The fallout from the snafu led to key departures at the company, including the resignation of Vice President Elizabeth Lyons Houston, whose family had been an early investor in the company. Although no longer CEO, Eric Bell remains with the company. Blue Duck also eliminated its software development team and outsourced its software engineering needs.
Using the $4 million, Blue Duck will look to rebuild its executive team, according to the release. Former Chief Business Officer Michael Keane quietly moved into the role of CEO after the City’s rejection of Blue Duck’s proposal.
The funding comes in the form of SAFE, or simple agreement for future equity, a crowdfunded type of equity offering that provides investors with a stake in the event a triggering event, such as a sale, merger, or initial public offering, occurs. The U.S. Securities and Exchange Commission has raised concerns about SAFEs.
Despite visible dysfunction within the company, Blue Duck said the latest funding round provides validation that it remains viable.
“Our success in closing this final … round of SAFE funding is evidence that sophisticated investors recognize Blue Duck as a strong, well-managed mid-market company in the e-scooter industry,” Paul Bell said.