Bird, a shared micromobility company, has made a surprising move by acquiring its competitor, Spin, from Tier for $19 million. The deal includes $10 million in cash, $6 million as a vendor take back, and $3 million as a hold back. This acquisition marks Bird’s expansion in the market and is expected to bring immediate growth and synergies to the company.
Key Takeaway
Bird’s acquisition of Spin from Tier for
9 million is a strategic move to expand its market presence and achieve long-term sustainable profitability. This deal adds Spin’s fleet of over 60,000 vehicles to Bird’s portfolio and brings in synergies and growth opportunities. Bird plans to use the acquisition to expand in key cities and leverage Spin’s technology and geographic footprint.
Tier’s Struggles and Spin’s Acquisition
Tier had previously purchased Spin from Ford in March 2022 to strengthen its presence in the United States. However, Tier has faced challenges in maintaining its lead and reaching profitability. In an effort to find a buyer, Tier raised a convertible note round in May. There have been rumors that Voi, a Swedish micromobility operator, is in talks to acquire Tier.
Despite the acquisition, Tier will continue to operate as a separate entity with its own app. The change is similar to when Tier purchased Spin from Ford, where Spin became a wholly owned subsidiary of Bird Rides Inc.
Bird’s Financial Situation
Bird, like Tier, has been struggling to achieve profitability and sustainability. In the second quarter of this year, Bird reported negative free cash flow of -$1.8 million. However, the company has been cutting costs and narrowing the gap. The acquisition of Spin is expected to contribute to Bird’s earnings and bring in upwards of $20 million in synergies.
Expanding Geographic Footprint
Spin currently operates in over 50 cities and university campuses, with minimal overlap in Bird’s existing operations. This acquisition allows Bird to expand its geographic footprint, particularly in cities like Baltimore, Salt Lake City, and Washington D.C. It gives Bird access to Spin’s fleet of over 60,000 vehicles, including newer models with battery swapping capabilities.
No Immediate Changes
Bird has no plans to change Spin’s operating model, which includes the use of contractors as “fleet managers.” Bird had previously aimed to bring more fleet managers in-house as part of its sustainability efforts. The company has assured Tier employees that there will be no immediate personnel decisions or market closures, with only a small number of exceptions.
