The Rise and Fall of Electric Scooter Company Bird: From Unicorn to Bankruptcy

Introduction

The once high-flying start-up, Bird, which was hailed as the next big thing in personal transportation, has filed for bankruptcy protection. This development is another indication that the shine on the electric scooter industry has started to fade.

Financial Struggles and Bankruptcy Protection

Bird announced on Wednesday that it had filed for bankruptcy protection. To continue its operations, the company secured $25 million in financing from Apollo Global Management’s commercial lending unit, MidCap Financial, and the firm’s second-lien lenders. Michael Washinushi, Bird’s interim chief executive, will remain in his position as the company pursues a turnaround plan that may involve selling assets.

A Warning Sign

A year ago, Bird had warned investors that without raising cash, it might not be able to sustain itself as a going concern. This warning has now become a reality as the company faces financial difficulties.

Industry Challenges

Bird is not the only start-up in the electric scooter sector that has faced challenges. Micromobility.com, formerly known as Helbiz, was recently delisted from the Nasdaq, and Tier Mobility had to undergo layoffs for the third time in the past month. These struggles indicate that the industry as a whole is facing significant obstacles.

From Unicorn to Bankruptcy

Bird was one of the fastest start-ups to reach a billion-dollar valuation and become a unicorn. The company positioned itself as a partner to help cities go green and quickly expanded after its establishment in 2017. It received substantial funding from prominent Silicon Valley investors, including Sequoia Capital and Accel Partners. Bird went public in 2021 through a merger with a special purpose acquisition company (SPAC).

However, Bird’s losses continued to accumulate, leading to its delisting from the New York Stock Exchange in September. The company admitted to overstating its revenue for more than two years, and its founder, Travis VanderZanden, left the company in June.

Continued Operations

Although Bird has filed for bankruptcy protection, its Canadian and European businesses are not part of the bankruptcy and will continue to operate as usual. Bird scooters can be found in over 350 cities worldwide, excluding those affected by the bankruptcy.

Controversies and Regulations

The electric scooter industry has faced criticism in recent years due to complaints about abandoned rental scooters cluttering sidewalks and parks. Paris became the first European capital to ban e-scooter rentals this year, although privately owned e-scooters are still allowed.

Overall, Bird’s bankruptcy filing highlights the challenges faced by the electric scooter industry and serves as a cautionary tale for other start-ups in the sector.