Shared micromobility company Bird has acquired competitor Spin from Tier for $19 million, including $10 million in cash, $6 million in a vendor take back and $3 million as a hold back.
Tier had purchased Spin from Ford back in March 2022 to expand its presence in the U.S., but Tier has struggled to maintain its lead and reach profitability. The company raised a convertible note round in May as it searched for a buyer. There have been reports that Voi, a micromobility operator out of Sweden, is in talks to buy Tier, but the company has not yet confirmed.
The news that Bird, another operator struggling to reach profitability or even sustainability, is buying Tier is surprising. Bird closed out its second quarter with negative free cash flow of -$1.8 million, but that gap is starting to close as the company slashes costs.
Bird says the transaction is expected to have upwards of $20 million in synergies and add immediate growth to its earnings, in part due to recent operational restructuring. In August, Bird replaced its CEO Shane Torchiana with Michael Washinushi, formerly CFO, as interim CEO.
Spin delivered about $45 million in net revenue in the 12 months ending in June 30, 2023, which brings Bird and Spin’s combined net revenue to $265 million for that period.
Spin has operations in over 50 cities and university campuses, and Bird says the overlap is minimal. The acquisition gives Bird a larger geographic footprint. Another puzzling outcome, considering Bird in October 2022 exited several dozen U.S. cities in order to downsize.
Bird says it will use the acquisition to expand in cities like Baltimore, Salt Lake City and Washington D.C.
“Spin is a great financial and strategic acquisition for Bird and we expect this acquisition will enable us to achieve long term sustainable profitability. In addition to our overall market leadership in North America, the company now holds a leading market share position in key markets, more new vehicles, cutting-edge technology and a significantly stronger financial position,” said Washinushi in a statement. “Bird and Spin have many strategic synergies, which we believe will have an immediate impact in the third quarter.”
The buy adds Spin’s fleet of over 60,000 vehicles under Bird’s purview, including many newer models with battery swapping capabilities — something Bird has lagged on that has had an effect on its efficiency and bottom line. Many of Spin’s fleet also use Drover AI’s sidewalk detection technologies.
Most of Bird’s fleet in the U.S. is run by contractors, or “fleet managers.” Part of Bird’s previous strategic mission to become more sustainable was to bring more fleet managers in-house. The company did not respond to TechCrunch in time to confirm whether Spin’s operations will be done in-house or by fleet managers.
This story is still developing. Please check back in for updates.
Source: Tech Crunch
