Bird SPAC IPO: Electric Scooter Company Plans to Go Public

Micromobility Companies and the Rise of SPACs

A growing number of micromobility startups are mirroring the strategy of electric vehicle (EV) companies by becoming publicly listed through mergers with special purpose acquisition companies (SPACs). This financial approach gained significant traction in 2020.

Bird Rides' Planned Merger

Bird Rides, a micromobility provider initially founded in California and now serving over 100 cities throughout the United States, Europe, and the Middle East, is planning a merger with Switchback II Corporation, a blank-check company based in Dallas. This information was reported by dot.LA. Switchback was established in 2019 and is led by Scott McNeill and Jim Mutrie, both formerly of RSP Permian, an oil and gas drilling company.

Following a Trend: SPACs in Micromobility

Bird represents the second scooter company this year to bypass the conventional initial public offering (IPO) route and instead utilize the increasingly popular SPAC mechanism. Earlier in February, Helbiz, a micromobility startup operating in both Europe and the U.S., also achieved public company status through a SPAC merger with GreenVision Acquisition Corp.

Given the decline in ridership experienced by many micromobility companies during the previous year’s pandemic, it is anticipated that more will explore the SPAC route to gain rapid access to capital, avoiding the lengthy and costly procedures associated with a traditional IPO.

A request for comment from Bird has not yet received a response.

Financial Performance and Valuation

Bird’s valuation stood at $2.85 billion at the beginning of 2020. However, the company has faced challenges, particularly during the pandemic, which resulted in a revenue decrease to $95 million in 2020 – a 37% reduction compared to the prior year, as detailed in a pitch deck reviewed by dot.LA. In response to these difficulties, Bird reduced its workforce by 406 employees, representing approximately 30% of its staff, as a cost-cutting measure.

The projected transaction values the company at $2.3 billion, a decrease from its previous valuation. The merger will provide Bird with crucial capital, likely to be allocated towards debt repayment and the expansion of its European operations, with a focus on achieving profitability.

Last month, the company announced plans to invest $150 million to double its European operations by expanding to 50 new cities.

Path to Profitability

The pitch deck further reveals key financial and ridership metrics. Bird anticipates achieving profitability by 2023, projecting a reduction in losses to $96 million this year and $28 million the following year. To reach profitability, the company needs to generate $815 million in revenue by 2023, compared to an expected $188 million in revenue for the current year.

According to dot.LA, “The financials included in the slides reveal a company quickly burning through the $1.1 billion of cash it has raised since 2017, with a $226 million adjusted EBITA loss in 2019 and a $183 million loss last year.”

Ridership and Future Prospects

The pitch deck also indicates a recovery in ridership following lockdown periods, with an 81% increase in topline revenue over the past month. However, this growth may be partially attributable to favorable springtime weather conditions.

Bird was recently awarded a permit to operate within New York City’s pilot e-scooter program in the Bronx, a development that could positively influence the company’s future. Despite losing bids in Paris, Chicago, and San Francisco, the company benefits from the increasing number of cities establishing supportive regulatory frameworks for shared micromobility, advancements in hardware technology, and ongoing industry consolidation, all of which contribute to the potential for substantial growth.

Bloomberg initially reported on Bird’s discussions with Credit Suisse regarding a potential SPAC deal in November of last year. Furthermore, The Information reported that Bird has been securing $100 million in convertible debt from its current investors, which could be converted into stock, although the company has not yet officially confirmed this arrangement.