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Benjamin Cher · · 5 min readInvestors dragged as Beam hit with fraud allegations
Beam Mobility, an e-scooter-sharing service provider based in Singapore, has managed to attract several marquee investors since its launch in 2018.
On its capitalization table – a spreadsheet that details who owns what percentage of a startup – are renowned names such as US VC firm 500 Global, SMRT’s Momentum Ventures, and the Singapore Economic Development Board’s investment arm, EDBI.
A Beam Mobility e-scooter / Photo credit: Beam Mobility
But these investors’ reputations may be dragged down as Beam has been accused of defrauding several town councils in Australia and New Zealand.
The company had secured contracts with these town councils to provide their districts with e-scooters for rent. These contracts came with a cap on the number of e-scooters, based on what the town councils deemed as an amount that would not compromise safety in their districts. Each mobility device was also taxed by the councils.
Leaked whistleblower documents, however, allege that Beam was circumventing a third-party tracking platform to count the number of devices operating in some districts.
The company is said to have deployed more than the allowed number of mobility devices in these districts. The excess devices were declared as inoperative to the third-party platform, but users were reportedly able to continue renting these “phantom” e-scooters.
See also: Micromobility firm Beam logs 36% revenue boost in 2023, hits EBITDA profitability
Market watchers say this could have been a quick way to raise supply and boost revenue.
“Our intention was to ensure there [was] an adequate number of usable vehicles available to the public within the limits of the agreed terms with councils,” Beam explained in a statement.
Termination of contracts
Action against the startup has been swift.
The allegedly defrauded town councils have moved to terminate their contracts, and some have also referred Beam to the authorities.
Beam’s co-founders Alan Jiang (left) and Deb Gangopadhyay (right) / Photo credit: Beam Mobility
Extreme example
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The company allegedly deployed “phantom” e-scooters for rent in Australia and NZ, which some say was a way to boost revenue.
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