Scooter scaleup Tier has raised additional funding from existing investors, Sifted has learnt.
The company confirmed to Sifted that the money came from “the majority” of existing investors and was in the form of a convertible note. Tier’s investors include Speedinvest, Northzone, Mubadala Capital, Goldman Sachs and SoftBank.
Sky News reported earlier this month that the Berlin-based company was working with bankers to raise a new equity and debt round in the hundreds of millions, but those talks didn't produce “satisfactory terms” for the company.
Sources close to the company tell Sifted that Tier is now in conversation with multiple potential acquirers.
Companies often raise using convertible notes, a form of debt that later converts to equity if it's not paid back. Such arrangements also allow companies to raise capital without agreeing on a valuation with investors, which has made them attractive to founders as valuations have fallen over the past year.
German media previously reported that the convertible loan was worth €30m, but Tier declined to comment on the size of the fundraise. But according to the company, since the announcement of its $200m Series D in October 2021, it's raised €200m in debt and equity financing.
“As you know, the markets have tightened significantly, making capital harder to come by. But we are grateful to have the ongoing support of our investors, who are fully onboard with our mission to change mobility for good and continue to support us,” Tier tells Sifted.
“We are therefore comfortable that we have sufficient funding to have a successful 2023 and we're excited as we head into the high summer season now.”
Tough times for Tier
Tier is one of Europe’s leading micromobility players. It operates e-scooters and e-bikes in 560 cities around the world, has acquired several competitors (including nextbike and Spin) and had raised $560m in total by the end of last year.
However, Tier is yet to turn a profit and has now been through several rounds of layoffs, letting go of 180 people in August 2022 and another 100 in January 2023.
It's also coming up against an increasingly unfriendly political climate: one of its big markets is Paris, which voted to ban rental e-scooters a month ago. Tier currently has a licence to operate 5,000 of them in Paris, which it will have to remove by the end of August. Earlier this year, Tier lost a tender in Oslo, and it was excluded from the tender in Vienna last month too.
