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Just a few years ago, electric scooters were storming onto city roads. Early adopters thought they were fun, fast and cheap. Critics said they were a nuisance and dangerous for pedestrians. Venture capitalists poured billions of dollars into so-called micromobility startups.
Meanwhile, Bird Global, a pioneer in electric scooter rentals, has filed for Chapter 11 bankruptcy protection.
The startup became the fastest company in history to become a “unicorn” with a valuation of over $1 billion before being hit hard by coronavirus lockdowns and causing passenger numbers to plummet.
But it was rising interest rates and the end of the era of low interest rates that brought about the fatal shotgun blast.
Bird had no idea how to make money. Renting scooters didn't make economic sense on any level. The scooters are expensive to buy and maintain, but they needed to keep rental prices low to keep riders coming.
At the same time, Bird has had to deal with competition from Western scooter upstarts and regulatory backlash: City officials tired of dealing with piles of abandoned e-scooters on sidewalks and in roads.
Bird has posted net losses of more than $1.6 billion since 2018. As of the end of September, it had just $10.2 million in unrestricted cash and cash equivalents.
When capital was virtually free, investors were happy to back high-growth, loss-making startups, which helped Bird go public through a special purpose acquisition company in 2021. At its peak, the company was valued at nearly $2.5 billion.
The company was delisted from the New York Stock Exchange in September after failing to maintain a market capitalization above $15 million for 30 consecutive days.
Under the restructuring agreement announced Wednesday, Bird will essentially be bought by its creditors. Apollo and Bird's second lien holders have agreed to provide a $25 million loan to keep the business afloat while the restructuring proceeds through the courts. Bird will sell assets that existing creditors have agreed to buy.
Other former top talent is expected to be let go as well.
The Lex team would love to hear more from our readers, so let us know what you think about the electric scooter boom in the comments section below.
