European e-scooter rivals ink merger

Consolidation comes to a sector where profitability has proven elusive

European e-scooter rivals ink merger
Tier and Dott products will both remain visible on Europe's streets, at least for now

Micro e-mobility firms Tier and Dott have struck a preliminary agreement to merge, with various backers of both companies agreeing to inject €60mn ($65.9mn) in equity into the combined entity.

With combined operations across cities including Berlin, Brussels, Dubai, Helsinki, London, Madrid, Paris, Rome, Tel Aviv and Warsaw, the business “will be well positioned to be profitable”, the merging companies predict. Adding together their current operations equals combined revenues of €250mn, from 125mn+ trips a year in more than 20 countries.

Co-founder of Tier Lawrence Leuschner will become chairman of the new firm, while its CFO Alex Gaye will have the same role in the expanded company. Dott co-founders Henri Moissinac and Maxim Romain will be CEO and COO, respectively. Headquarters will be in Berlin, Tier’s current base.

“I am delighted to join forces with Dott, further strengthening our position as the European micro-mobility champion and marking the next phase in the development of the industry,” says Tier’s Leuschner. “With an expanded footprint and combined expertise, I look forward to providing a record number of rides in 2024.”

“By bringing Tier and Dott together, we are well positioned to capture the next phase of growth and further accelerate our path to profitability,” says Dott’s Moissinac.

Leaner times

European e-scooter firms have found that journey to breakeven increasingly tough in an inflationary period of more expensive capital and constrained consumer spending, with several falling by the wayside. In late November, German retailer Unu filed for bankruptcy in a Berlin court.

That followed Dutch commercial scooter leasing firm Greenmo going into administration last February, a few months after its Go Sharing consumer-facing sister withdrew from 33 of the 45 cities it served across the Netherlands. 

But the biggest recent casualty in global terms has been US firm Bird, the sector's first $1bn-valed 'unicorn', which filed for Chapter 11 protection in late December. Tier sold its US-focused arm Spin to Bird as recently as September.

According to data from technology intelligence service Sifted from February, Tier is by far Europe's largest e-scooter firm in terms of cities served, while Dott ranks fourth. Their combination may raise the question whether Bolt — an Estonian firm that more closely resembles Uber in that it also offers ride-hailing and food delivery — in second for cities served might look to also scale up with a move for third-placed Voi of Sweden.

Future integration

While the current plan is for both brands to continue, with riders continuing to access Tier and Dott vehicles through their respective apps. But the firms admit that “more convergence [is] possible in the future”.

The larger Tier currently operates in 400+ cities across 21 countries in Europe and the Middle East. Dott currently operates over 40,000 e-scooters and 10,000 e-bikes in cities in Belgium, France, Israel, Italy, Poland, Spain, and the UK.

The €60mn investment will be led by Mubadala Capital, owned by the state of Abu Dhabi, and Belgian investment fim Sofina, and includes investors Estari, M&G, Prosus Ventures, Novator and White Star Capital. Closing of the deal is subject to several conditions but is still expected within the next two months.

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