Following recent profit losses, e-bike and e-scooter start-ups Tier and Dott announced on Wednesday (10 January) a preliminary merger agreement that seeks to make the new entity the ‘European champion’ of micro-mobility.
The management of the new Berlin-headquartered company will combine the founders and leadership from Tier and Dott, with Dott’s shareholders to sell their shares to Tier.
Tier cofounder and current CEO Lawrence Leuschner will become chairman, while the new entity’s CEO and COO roles will be given to Dott’s French cofounders Henri Moissinac and Maxim Romain.
The companies have a combined revenue of €250 million, with an estimated 125 million trips annually in more than 20 countries.
The deal is still subject to financial conditions and is expected to be concluded in March.
Thin margins
The micro-mobility sector has suffered from scattered regulation around Europe and the world, putting a strain on operators.
In September, the city of Paris became the first city in Europe to implement a total and permanent ban on self-service e-scooters. Over Europe, regulations are tightening in cities following concerns over safety and the cluttering of public spaces.
In recent years, the Berlin-based Tier, which employs 1,400 people, has struggled to reach profitability, making layoffs in both 2022 and 2023. In November 2023, Leuschner said that Tier had to let go of 22% of its workforce to reach profitability.
While Dott’s growth strategy mainly focused on free-floating mobility, Tier decided to scale up globally and try different business models, acquiring different companies, like Nextbike, which offers a dock-based bike-sharing system.
Tier raised over €220 million in 2020, while Dott raised a total of €210 million.
Despite the difficult economic context, a group of Tier’s investors are backing the acquisition to the tune of €60 million to address competition from Lime, Bird, Uber, Bolt and Voi.
“We are very optimistic about the future of shared micro-mobility” Dott cofounder Moissinac said, quoting cities’ determination to reduce car dependency and encourage citizens to turn towards sustainable transport choices.
Although part of one entity, the two brands will, for now, still be available on their respective applications, though “more convergence is possible in the future”, according to their press statement.
[Edited by Luca Bertuzzi/Nathalie Weatherald]
