Bird announces acquisition of European electric scooter startup Circ
According to foreign media report The Verge, Bird announced that it will acquire electric scooter startup Circ, which launches electric scooter rental business in Europe and the Middle East. The acquisition is the latest sign of a merger between electric scooter companies as it increasingly pursues a profitable business model. As part of the deal, Bird will hire Circ's 300 employees, most of them from Berlin. Bird also announced a $ 75 million expansion of its Series D funding, bringing the total size of the round to $ 350 million-although it will not disclose the value of the transaction.
Circ is not the first acquisition completed by Bird. The Santa Monica-based company acquired West Coast rival Scoot for $ 25 million in early 2019. After being initially suspended by the San Francisco government in 2018, Bird returned to the lucrative San Francisco market. Until recently, Scoot was one of only two electric scooter companies licensed to operate in San Francisco. (The city recently approved Jump, Spin, and Lime for Uber, while revoking Skip's license.)
In addition to the UAE, Circ currently operates in 40 cities in 14 European countries worldwide. The company recently laid off dozens of workers at its headquarters and regional locations, citing a shift in focus to "efficiency and operational excellence." About 50 employees were fired, according to TechCrunch. Bird also cut salaries and fired 20 employees in its acquired Scoot.
Nonetheless, Bird's announcement of an additional $ 75 million in funding is a sign that venture capital firms are injecting capital into electric scooter companies despite reports of substantial cash losses and vandalism of electric scooters. According to data from The Information, Bird lost nearly $ 100 million in the first quarter of 2019, while revenue has shrunk sharply to only about $ 15 million.
Bird says it can attract investors by re-emphasizing unit economics (how much revenue each scooter brings to the company). One of the most important numbers to consider is the life of each scooter. The more trips and mileage each scooter can cover, each scooter company must recover the cost of each car before it can start making money.
This is a difficult winter for the electric scooter industry. Major operators like Lime, Uber, and Lyft have begun layoffs and are gradually exiting the market as they begin to focus on making their business profitable.