Electric Scooter Startup Bird Agrees to Go Public With a $2.3 Billion SPAC Deal

By Mariliana Fotopoulou Wednesday, May 12, 2021

Electric scooter startup company Bird Rides announced it is going public in a merger with a SPAC, or special purpose acquisition company, in a $2.3 billion business deal. The figure represents a lower business valuation than what the startup company acquired in private markets prior to the COVID-19 pandemic.

Bird electric scooters.

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Bird will merge with a Switchback II SPAC in a business deal that includes a $160 million PIPE investment led by Fidelity, which already has a stake in the electric scooter company. Moreover, the company will generate $40 million in business capital from Apollo Investment and MidCap Financial Trust.

“Since 2017, we have driven adoption of micromobility which has resulted in rapid growth. During this time, we have advanced our operating model, supported by proprietary technology and hardware, to scale our mission and reach more cities. This foundation has driven our strong unit economics and delivered our successful track record to date,” a founder and chief executive of Bird, Travis VanderZanden, said in a press release.

The company is working to become a market leader and further grow its business. VanderZanden notes that his startup is operating in a business sector estimated at $800 billion in annual revenues. The SPAC deal will provide Bird with $428 million of cash, which includes $316 million cash-in-trust as a SPAC commitment and a further $160 million from the PIPE investment.

The electric scooter startup will likely use the business proceeds to reduce its debt and finance its further expansion in Europe. The startup company recently said it wants to invest $150 million to double its operations in the European market by expanding into 50 new cities. As of now, the California-based startup operates in more than 100 cities across the US, Europe, and the Middle East.

“As a category creator for the shared micromobility space, Bird has capitalized on its first-mover advantage to address the significant market opportunity while also providing an efficient and eco-friendly transportation alternative,” said Jim Mutrie and Scott McNeill, Co-Chief Executive Officers and Directors of the Switchback SPAC.

The electric scooter company secured almost $1 billion in private funding, including the $208 million investment from Bracket Capital, Sequoia Capital, and Valor Equity Partners last month. Bird expects to reach profitability by 2023 after slashing this year’s losses to $96 million and next year’s to $28 million.

This also means Bird would have to garner about $815 million in business revenue in 2023 in order to become profitable. The startup expects to nab $188 million in 2021.

Bird is now the second electric scooter startup company to make its public debut through a SPAC merger after Helbiz merged with another SPAC business back in February. The combined company is set to list its shares on the New York Stock Exchange (NYSE) in Q3 this year.

Startup Savant reported last month that electric scooter company Dott raised $85 million to assist in further product and business growth.

Summary

Electric scooter startup Bird said it is going public via a SPAC merger with Switchback II in a business deal that values the company at $2.3 billion. The startup said it would use the raised proceeds to pay off debts and fund its further expansion in Europe.

About the Author


Headshot of Mariliana Fotopoulou

Mariliana has an MSC in Consumer Analytics and Business Strategy. She has a special interest in fast-moving industries and Big Data.

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