E-scooter company Bird gets lifeline from independent Canadian subsidiary

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E-scooter sharing firm Bird Canada Inc. has swooped in to rescue the troubled Miami-based parent company from which it licenses its branding and software.

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Bird Global Inc. announced Wednesday that it will merge with the independent Canadian company in a deal that will see an estimated US$32 million in new capital injected into the struggling micromobility company, including US$4 million which has already been funded.

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The merger comes just in time for Bird Global which has struggled financially since the company went public via a special purpose acquisition merger in 2021. The company warned in November that if it were unable to raise additional capital or generate increased cash flow it could be forced to scale back operations or seek bankruptcy protection.

Bird had previously boasted e-scooter and e-bike sharing operations in some 400 cities, but the company has been forced to wind down operations in some unprofitable European and U.S. markets in recent months.

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In November, the company also notified the U.S. Securities and Exchange Commission that it had overstated its revenue for two years by recognizing payments from certain customers who had insufficient balances on preloaded wallets.

The company said in a statement Wednesday that the transaction will add “additional profitable operations to Bird’s global platform, while consolidating North American operations.”

Bird Canada has operated independently and profitably since 2019 when it launched using Bird technology, branding and vehicles.

Following the merger, Bird Canada’s CEO Stewart Lyons is expected to join Bird as president. Two other Bird Canada executives will also join the leadership ranks at Bird Global.

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“After four years of building the most successful operator in the Bird Global network, we are very excited to bring our lean operating philosophy and proven experience in shared micromobility to Bird Global,” Lyons said in a news release Wednesday.

Bird Global’s stock closed up four per cent Wednesday on the news. The company’s share price is down more than 97 per cent year-to-date.

“We believe that this new funding, coupled with the operational rigour provided by the addition of Bird Canada, will contribute to Bird’s goal of becoming adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) profitable on a full year basis in 2023,” said Shane Torchiana, CEO of Bird Global.