Bird, the electric scooter company that helped launch the global micromobility boom, is planning to go public via a reverse merger with a special acquisition company, or SPAC, according to dot.LA. Bird is merging with Switchback II Corporation, a Dallas-based “blank check” company focusing on companies reducing carbon emissions, according to documents reviewed by the website.
Bird is the latest transportation company, but one of only a few e-scooter companies, to go public. A record number of companies have gone public this past year by merging with SPAC shell corporations, which avoids the scrutiny of a traditional IPO.
Reports first surfaced last November of Bird’s SPAC ambitions, after Bloomberg reported that the Santa Monica-based company was working with Credit Suisse to find a potential partner. Spokespersons for Bird and Switchback II Corporation did not respond to a request for comment.
The deal will net Bird hundreds of millions of dollars in cash, which it can use to fund its operations as it continues to chase profitability. Scooter sharing is a cash intensive business, with companies routinely spending more on each scooter than they take in with revenue. Very few companies operating scooter fleets have succeeded in turning a profit.
dot.LA, which has gotten a look at the pitch deck, has more details about the transaction:
The transaction values Bird at $2.3 billion, below the $2.85 billion valuation it reached in the beginning of 2020. But that was before the pandemic, which drove 2020 revenue down to $95 million, a 37 percent decline from 2019, according to a deck pitching the deal seen by dot.LA.
Bird first launched its scooter sharing service in Santa Monica in September 2017. Since then, it has grown to over 200 cities, facilitated over 10 million rides, and raised cash at an unprecedented pace. It has the distinction of being the fastest startup to achieve a $2 billion valuation.
But the pandemic has taken a serious toll on the company. Bird saw its ridership numbers plummet at the onset of the lockdown last spring. Last March, the company laid off over 400 employees in a now infamous Zoom call.
But as lockdowns ease and customers return to scooter sharing, Bird’s woes continue. The company was snubbed by a number of major cities issuing permits to scooter operators, including Paris and San Francisco. (The company does operate in San Francisco through its Scoot subsidiary) Bird was recently selected to participate in New York City’s inaugural scooter program — a decision that may have helped buoy the company’s long-term financial prospects.
Bird has grown increasingly reliant on revenue from its fleet manager program, in which the company sells its older scooters to small operators and takes a cut of each ride. The program has led some operators to fall into deep debt, OneZero reported last year. The company has also launched Bird Platform in countries like Switzerland and Estonia, cheering investors who hope it will lower Bird’s labor and capital expenses.
In January, The Information reported that Bird was nearing a deal to raise more than $100 million in convertible debt from some of its existing investors. The debt, which could eventually be converted into stock, would help Bird avoid selling shares at a lower price than in earlier fundraising rounds. But the company has yet to disclose whether that deal has gone through.