The Business Times

EU scooter startups said to discuss mergers as US threat grows

Published Thu, Feb 7, 2019 · 03:43 PM
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[LONDON] Europe's scooter startups Tier Mobility and Voi Technology AB have held early-stage discussions to combine their operations, in response to the impact of larger US rivals on the continent, according to people familiar with the discussions.

The talks, which started in November, recently stalled after Voi concluded that it could continue its growth independently, one person said. All of the people asked not to be identified discussing private plans.

Fredrik Hjelm, chief executive officer of Voi, said via email that "other local players" had approached the company for merger talks, but declined to comment further on the discussions.

Representatives for Tier didn't respond to multiple requests for comment.

The European scooter industry has become quickly congested, with a host of startups springing up in quick succession. Stockholm-based Voi launched in August, and Berlin's Tier and Wind Mobility followed within weeks. Flash, the company created by Delivery Hero co-founder Lukasz Gadowski and also headquartered in Germany, has small-scale operations in Portugal, Spain and Switzerland, and is planning a wider European roll-out in the spring.

The arrival in Europe over the past year of US rivals Lime and Bird Rides Inc have caused local players to consider how to deal with competitors that have much deeper pockets. Both Lime and Bird have raised hundreds of millions of dollars and have been aggressively expanding across Europe. They're already said to be seeking hundreds of millions more in funding.

Lime is already active in about 22 European cities, according to its website, a little more than a year after it announced its debut on the continent.

In comparison, Flash raised US$62 million during its first funding round in August, Voi announced a $50 million initial round in November. Tier has raised about US$30 million, and Wind about US$22 million.

Aside from US competition, investors in European scooter startups are concerned they will remain too fragmented to support successful fund-raises for all players, the people said. There are more than half a dozen comparably-funded players battling it out in Europe, compared to two or three frontrunners in the U.S.

Potential mergers are one of the routes Europe's nascent scooter industry is considering taking to fight of the US giants, but there's also a fight for top talent. Voi has hired Lime's Noa Khamallah to become its vice president of global strategy, while Matt Turzo left ride-hailing company Lyft Inc to take the European chief operating officer role at Wind in November.


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