According tomedia, The Verge reported that Bird has announced that it will buy Circ, the maker of electric scooters, which operates electric scooter rentalbusiness in Europe and the Middle East. The acquisition is the latest sign of a merger between electric scooter companies as it pursues a profitable business model. As part of the deal, Bird will employ 300 people at Circ, most of them from Berlin. Bird also announced a $75 million expansion of its D-round financing, bringing the total size of the round to $350 million – although it would not disclose the amount of the deal.
Circ is not Bird’s first acquisition. The Santa Monica-based company bought West Coast rival Scoot for $25 million in early 2019. After being shut down by the Government of San Francisco in 2018, Bird is back in the lucrative San Francisco market. Until recently, Scoot was one of only two electric scooter companies licensed to operate in San Francisco. (The city recently approved Uber’s Jump, Spin and Lime, while revoking Skip’s license.) )
In addition to the United Arab Emirates, Circ currently operates in 40 cities in 14 European countries around the world. The company recently laid off dozens of workers at its headquarters and regional locations, citing a shift towards “efficiency and operational excellence”. According to TechCrunch, about 50 employees were laid off. Bird also cut pay, laying off 20 employees in its acquisition of Scoot.
Still, Bird’s announcement of an additional $75 million in financing is a sign that venture capital firms are still pumping money into the company despite reports of heavy cash losses and reports of the indiscriminate destruction of electric scooters. Bird lost nearly $100 million in the first quarter of 2019, according to The Information, while revenue plummeted to just about $15 million.
Bird says it can attract investors by refocusing on unit economics, how much revenue each scooter brings to the company. One of the most important numbers to consider is the life of each scooter. The more travel and mileage each scooter can cover, the more each scooter company will have to recover the cost of each car before it can start making money.
It’s been a tough winter for the electric scooter industry. Major carriers such as Lime, Uber and Lyft have begun to lay off workers and phase out of the market as they focus on making their businesses profitable.