Micromobility company Bird is in talks to acquire a smaller European competitor, Circ, according to people familiar with the discussions.
The exact terms of the discussions are as yet unclear and Circ declined to comment, but it follows months of rumours that Circ was struggling to raise its next round of funding.
Circ, the Berlin-based startup formerly known as Flash, last raised a Series A of €55m in January 2019 — a large round, but cash runs out quickly in the capital-intensive scooter market.
In the meantime, its competitors in Europe have all raised big rounds: Sweden's Voi raised $85m in November; Germany's Tier raised $60m in October; and Spain's Wind raised $50m in July.
The talks were first reported by the Financial Times.
Circ
Circ was founded at the end of 2018 by Lukasz Gadowski, cofounder of food delivery giant Delivery Hero.
But it seems that former experience in the mobility and logistics space hasn't helped him with this venture.
One source close to several European and US scooter companies told Sifted that investors have already committed too much capital to the much-hyped scooter sector — and have realised that profitability might be a long time coming.
Tier and Voi have both stated that they are prioritising making profits this year, banking on swappable batteries and more durable models of scooters to help them do so.
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For Circ, however, it was too late.
A turning point
"This sends a strong message to the market from big US companies; we know you're running out of money, we know you're not going to raise any more, so we are going to wait til you are on your knees and come to buy you at a cheaper price," our source said.
The race is now on for Tier and Voi, Europe's best-funded scooter startups, to make money before they run out of runway.
It seems unlikely Bird would acquire another European business and Lime, another large US player, has been laying off staff recently. It is expected to also make redundancies in Europe, where it operates in dozens of countries.
Meanwhile, redundancies are expected at Circ.
