Alphabet invests in electric scooter trend through Lime
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Alphabet invests in electric scooter trend through Lime

Alphabet is looking to diversify itself beyond the internet and mobile businesses that form the core of the company’s profit makers. Investors, then, should not be surprised to discover that the Silicon Valley tech titan has invested in electric scooter service Lime, part of a growing trend towards new modes of transportation. How much of a stake Alphabet has purchased remains unknown. But anonymous sources have confirmed that Google Ventures is also involved in a leading position in the $300 million funding round. Allegedly, Alphabet has contributed a “similar amount” to its subsidiary.

Alphabet’s share price has appreciated by 8% over three months

graph 0307 alphabet

SOURCE: Yahoo Finance

Alphabet already has significant interests in the futuristic transportation businesses. The company’s foray into this emergent industry comes largely from its self-driving car segment (Waymo) and the public transit efforts made by its “urban living” division (Sidewalk Labs). In addition to these big plays, Alphabet has numerous smaller interests in businesses as diverse as SpinLaunch’s space cargo catapult, and Kitty Hawk’s flying cars.

Lime has become incredibly popular incredibly quickly. There is no guarantee, of course, that it will continue to prosper and grow. Still, Alphabet is wise to pursue diversification. Since its transformation from Google into Alphabet (today’s Google just refers to a division within Alphabet, rather than the whole company), it has offered investors more transparency over its business. This is doubtless a positive, and it was welcomed by Wall Street.

But the fact remains: Alphabet’s fortune is still very much determined by Google’s online ad revenue. If Alphabet wants growth to pick up, these are the types of risk it should be taking.

Disclosure

Dominion holds Alphabet in its Global Trends Managed Fund.


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