Miami-based e-bike and scooter firm Bird Global has become the largest micro-mobility operator in the US after acquiring bike-sharing and scooter company Spin, in a transaction worth $19mn. With the move, Bird will now serve 350 global markets — mostly US cities — with over 200,000 vehicles.
Bird expects the acquisition to contribute immediately to its revenue. Q2 of this year saw the company’s losses narrow significantly to just under breakeven.
The transaction is forecast to generate $20mn in value on top of the individual valuations of the companies involved, according to Bird. This suggests economies of scale through adding Spin’s operations in key markets like Baltimore, Salt Lake City, and Washington DC to existing Bird operations.
The firm also alludes to “recent operational restructuring” which it further expects to contribute to immediate earnings growth, including recent appointments of a new CTO and interim CEO.
End of growth era
Spin was sold by Berlin-based micro-mobility company Tier, which also operates in 260 cities across Europe and the Middle East. Tier bought Spin from US OEM Ford only in March 2022, in Tier’s first move into North America.
It was one a string of acquisitions by Tier, including its purchase of Italian firm Vento Mobility, Germany’s Nextbike, as well as digital services company Makery.
Just before the sale to Tier, Spin laid off a quarter of its staff in January 2022. The company placed blame on unregulated permit markets which “make it difficult to identify a clear path to profitability”, Spin CEO Ben Bear said at the time. Further layoffs followed in October 2022, reflecting lower-than-expected growth across the micro-mobility sector that also saw staff cuts at parent company Tier, as well as at Spin’s new owner Bird in the US.
Tier acquired Spin in March 2022 “at a time when industry was still growth-focused”, the seller tells EV inFocus. Since acquisition, the firm has focused on making Spin more efficient, modernising its fleet and putting the company on the path to profitability.
It boasts that it has upgraded the Spin fleet to 100pc swappable batteries; improved the efficiency and sustainability of operations; boosted CM2 contribution margin from -11pc in H1’22 to -1% H1’23, and reduced monthly overheads — from $7.2mn in March 2022 to 1.8m in March 2023 and H1 average from $5mn/month in 2022 to $2m/month in 2023. It also highlights an “enormous improvement” in Ebitda margin, from -224pc in H1’22 to 2022 to -63pc in H1’23.
Increased focus
July was in fact Spin’s first profitable month. But the firm admits that post-acquisition, “the business environment has changed dramatically”. “The tightening of financial markets made access to capital to fuel a strategy of expansion much more difficult. Accordingly, we pivoted to focusing on achieving profitability,” Tier says.
And the reversal out of North America is part of a decision to concentrate on markets where footprint is already wider. “We have taken the decision to divest US operations and to focus on Emea, where the vast majority of our business is,” Tier says.
By the same token, Bird can leverage its experience in US markets as the acquisition adds new US cities. But the buyer has been facing up to similar focus challenges.
"Last year we made the conscious decision to exit unprofitable markets, as a result we saw a year-over-year decline in rides. Nevertheless, we remain focused on our operational execution and becoming a profitable company," interim CEO Michael Washinushi said at Q2 results in August.
Bird’s share price jumped 104pc in late trading on Tuesday. But the jump still only took the price to c.$1.40 for a stock that was trading at almost $7/share as recently as April.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
