The battle for dominance of the micromobility market continues to rage… According to media outlet Sifted, German startup TIER Mobility is in advanced acquisition talks with European rival Bolt. The deal comes amid a wave of consolidation sweeping the micromobility sector, as growth capital remains hard to find and companies expensive to run…
“If you can’t beat them, get bought”
TIER is one of the leading European players in micromobility. It is well established in the market and operates electric scooters and bikes in 560 cities worldwide. In addition, over the years it has acquired several competitors (including Nextbike and Spin) and raised $200 million by the end of 2021. However, it seems that the wind has changed for this Berlin-based company, which is now experiencing difficult times.
Indeed, TIER is facing an increasingly hostile political climate towards electric scooters. In early April, the city of Paris (one of TIER’s largest markets) announced a ban on self-service scooters. Earlier this year, TIER lost a tender in Oslo, and was also excluded from the tender in Vienna last month. Today, TIER Mobility is said to be more than 130 million in debt and making heavy losses.
To cope, TIER took key strategic steps in March. The German start-up successfully raised funds through a convertible bond from its existing trusted investors. Among them such as Speedinvest, Northzone, Mubadala Capital, Goldman Sachs and SoftBank. In parallel, TIER also announced that it was looking for a buyer. The first to take a position on the matter is the American giant Lime. The two micromobility players had started discussions about a possible acquisition, but these were not successful and are now closed.
Bolt already well advanced on the file
Now it is Estonian giant Bolt, already well established as a provider of micro-capability services, that is reportedly on the case. Indeed, according to Sifted, Bolt is “currently conducting due diligence on TIER, but an assessment has not yet been agreed.” However, according to the same source, the deal could be completed within a matter of weeks. The acquisition would allow Bolt to expand in several key geographies. It would also be its first acquisition in the micromobility sector in certain geographical areas, such as the US.
Bolt reportedly told Sifted that it “is on track to be profitable in the next 12 months and plans an IPO in 2025.” Bolt and Tier Mobility are neck and neck in several markets, but few of the big ones. Indeed, Bolt has no micromobility operations in the US but is present in smaller markets where TIER does not operate, such as Georgia, Estonia, Lithuania and Romania. This complementarity can only be beneficial to the potential buyer.
Major difficulties for all operators
Finally, times seem complicated for most of the micromobility players. Investors and operators have reportedly told Sifted that the next six months will see many mergers and acquisitions in the sector. Today, competition in this market is fierce. Four local players dominate Europe. These include TIER, Voi, Dott and Bolt. Two American companies, Bird and Lime, are also doing well. However, there are also many small local operators, such as Pony in France, Beryl in the UK and Ryde in the Nordic countries. Many of TIER’s competitors are also reportedly struggling. Bird, which was listed at a valuation of $2.3 billion in 2021, has lost over 90% of its value. Voi, meanwhile, has seen its valuation fall by 57% since 2021 by its investor VNV Global.
Unfortunately, there is little chance that TIER will be able to sell at its estimated €2 billion valuation. See you in a few weeks to see if Bolt has gone through with its project, but more importantly, at what price…