Scooter startups Tier and Dott agree to merge

European scooter startups Tier and Dott are set to merge, the businesses have introduced.

Dott founder Henri Moissinac will take the CEO position on the new organisation, whereas Tier founder and CEO Lawrence Leuschner will transfer to a non-executive chair place. 

German publication Supervisor Magazin experiences that the merger will worth the brand new firm at simply €150m — an enormous drop from Tier’s 2021 valuation of €2bn. Tier tells Sifted it was not in a position to disclose the monetary particulars of the settlement, however that the deal is anticipated to undergo in two months. 

Current shareholders are investing €60m in fairness into the brand new joint entity. The spherical is being led by Tier’s largest backer Mubadala Capital and Dott’s essential investor Sofina, and likewise contains capital from Estari, M&G, Naspers, Novator and White Star Capital. Northzone (an early investor in Tier) and EQT Ventures (an early investor in Dott) haven’t participated. 

Each corporations have been struggling to succeed in profitability; asserting layoffs of twenty-two% of its workforce in November final yr, Tier CEO Lawrence Leuschner mentioned on LinkedIn that the corporate had improved its EBITDA from -63% in 2022 to -15% in 2023, however nonetheless wanted to convey its price base down. Dott additionally “carried out effectivity plans” final yr, it tells Sifted.

“The brand new joint entity shall be effectively positioned to be EBITDA worthwhile in 2024,” Tier tells Sifted — however not with out additional layoffs. “As integration work progresses to completely mix Tier and Dott into one entity, it’s in fact doable that additional efficiencies are recognized, together with making roles redundant,” the corporate provides. 

The lengthy hunt for a purchaser

Tier has been in acquisition talks for months. In Could 2023, Sifted reported it was in superior discussions with Tallinn-based mobility rival Bolt. Tier has additionally been in talks with Lime and Voi, in response to sources near the corporate. 

In accordance with two sources, all three corporations turned down Tier as a result of it did not share ample monetary documentation, particularly annual experiences — and has €100m in debt. “It was simply an excessive amount of danger,” one particular person near one of many different corporations tells Sifted.

“I used to be considerably shocked to listen to concerning the deal,” says one investor; Tier is 3 times larger than Dott, which could make it exhausting to combine the 2 corporations. 

To this point, Tier has raised $660m in fairness and debt from traders together with Mubadala, Northzone, SoftBank Imaginative and prescient Fund 2, White Star Capital and Speedinvest. Dott has raised €210m from traders together with Felix Capital, EQT Ventures, Naspers and Prosus Ventures.

​​Collectively the businesses generate mixed revenues of €250m and facilitate over 125m journeys a yr in additional than 20 nations, Tier tells Sifted.

However they’ve some vital market overlaps: each corporations — which function e-bikes in addition to e-scooters — presently have operations in Brussels, Paris, Lyon, Milan, London, Warsaw and Madrid, amongst different cities.

What occurs subsequent

The joint entity plans to proceed to function each the Tier and the Dott manufacturers. 

Dott’s cofounder Maxim Romain will take the COO position, whereas Tier’s Alex Gayer will take the CFO place. 

The merger leaves the European market to 3 corporations: American mobility firm Lime; Swedish scooter startup Voi; and Tier/Dott. Sources near Voi say it’s excellent news for the corporate: “There shall be one much less competitor, now.” They add that the advantages a merger will convey Tier and Dott received’t be in place for a couple of years and within the meantime “there shall be chaos”. 

Robust yr for micromobility

2023 was not type to the as soon as much-hyped micromobility sector. Dutch e-bike maker VanMoof declared chapter within the Netherlands and the UK in July and was later acquired by British know-how firm McLaren Utilized. Swedish electrical truck maker Volta Vans filed for chapter in October, Berlin-based e-scooter startup unu declared chapter in November and US big Chook filed for chapter in December. 

Paris banned scooters in the summertime — forcing Tier, Dott and competitor Lime (which every had 5,000 autos within the metropolis) to depart. In November, Berlin introduced plans to chop down the variety of scooters permitted within the metropolis centre from March 2024.