This move is part of a comprehensive restructuring plan, supported by the company's first and second tier lenders.
Just five years after electric scooter pioneer Bird achieved the prestigious unicorn status with a valuation of over a billion dollars, the company itself filed for Chapter 11 bankruptcy proceedings. This procedure of US bankruptcy law allows companies experiencing financial difficulties to continue to operate normally while trying to reach an agreement with their creditors. This application means that the company concerned has the will to carry out restructuring, under the supervision of a court.
This news comes as a shock to the mobility world and follows the recent 29 major fundraising of 2023. Founded in 2017 in Los Angeles by Travis VanderZanden, a former Uber and Lyft executive, Bird Global launched the trend of free-roaming electric scooters. Within nine months, the start-up reached the symbolic valuation milestone of one billion dollars. In three years, the company raised more than $600 million from investors.
New York Stock Exchange
Bird took advantage of the SPAC craze to go public in 2021, raising another $250 million. The company was valued at $2,3 billion. In a competitive market, Bird spent a huge amount, without worrying too much about losses, to roll out its scooters and bikes in 400 cities and campuses in the United States and Europe. The New York Stock Exchange decided to delist Bird after its market capitalization fell below $15 million.
Michael Washinushi, Bird Global's acting CEO, emphasized that they are making progress toward profitability and plan to accelerate this progress by restructuring their capital structure. Despite the bankruptcy, Bird Global will continue to operate normally during the restructuring process. Bird's European and Canadian operations are not affected by the bankruptcy filing.
Bird Canada and Bird Europe are not involved in this bankruptcy filing and continue to operate normally.
In the Netherlands, Bird is represented by the Popal Mobility Group (PMG). To ensure a smooth transition to bankruptcy, Bird filed a series of “First Day Motions” with the court, including provisions for paying wages and benefits to employees. These steps are intended to minimize the impact on city relations, riders, employees and other key stakeholders.
challenges
The sector faces major challenges due to strict regulations, safety concerns and sky-high operational costs. Not so long ago, micromobility giant Tier had to make massive layoffs, illustrating the context and difficulties faced by all players in the sector. The German micromobility giant made a crucial shift in their business strategy, focused on achieving profitability. Despite financial improvements, Tier has not yet reached profitability. This resulted in a new round of layoffs of approximately 140 employees, mainly central and regional staff.
